Question

Your Discussion should be a minimum of 400 words.

A manufacturing company that publishes it's its financial information: I chose Microsoft Corporation.

Describe the specific manufacturing costs it incurs, Categorize each cost into the three manufacturing cost categories, and state if the costs are variable, fixed, or mixed. Explain how you came to your conclusions.

Please Note:

Please do not plagiarize

Please do not send an image, please type.

Answer 1

Answer to question requires Cost incurred by Microsoft corporation for its services as well as goods and explanation as to categorisation of cost into fixed,variable or mixed.

Firstly every organisation incurred common costs unless they are involved in some other categories like construction sector,etc.

Microsoft corporation is a technology industry that has following supply:

1. Operating system for system processing

2. Cloud storage

3. Softwares

4. Database

So, for these it incurrs cost like

Fixed cost: Such coat that are fixed in nature irrespective of produced quantity. It is fixed in total but varies per unit basis.Microsoft incurred fixed expenditures like electricity expenses, renting of any technology, rent for the server's (in case it has taken server on rent),if it is own maiantainance of same.

Variable cost: such cost that vary with output production and remains fixed per unit.

Here , Microsoft corporation on supply of operating system requires software development which is intangible and hence intelligence and intellectual skills are the cost invested for the development of such softwares (Operating system is also one of the software),which it hires personnel,and hence labour hrs is the cost for production of operating system and software,which is a variable cost.Further computers involved for the production of such softwares are also their inputs for which they incurr cost like material cost and labour cost which are variable in nature .

Similarly,it provides the renewal of software and various updation which may be provided in form of DVD, online form etc in that case cost will be the material coat of DVD.

For supply of cloud Storage and database services ,it requires huge server's for storage ,for which it incurr Expenses like server purchase, temperature coolant,alarming system which also involves variabke cost.Here point to be noted is for Server purchase ,which is one time expense and hence could be classified as Sunk cost.

Similarly other products like it's windows Phone,laptop production ,they incurr expenditures like material purchase of them,labour incurrs for assembling,and other variable overhead like maiantainance of machineries etc these all cost are classified to be Variable cost.

So,by this way we saw various cost incurred by Microsoft corporation for its supply and thier categories as fixed variable or mixed cost.