he annual production capacity of Enterprise A is 20,000 units. For the year 2020 of the enterprise; The breakdown of production-sales volume and some expense items is as follows. According to the
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The annual production capacity of Enterprise A is 20,000 units. For the year 2020 of the enterprise; The breakdown of production-sales volume and some expense items is as follows.
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Fixed cost are of two types (1) Individual fixed cost or specific fixed cost (2) common fixed cost
(1) Specific fixed cost: specifically incurred for a product if product is discontinued then cost will be saved. for decision making of one product specific fixed cost has to be considered because it will change.
(2) Common fixed cost: Incurred for the organization as a whole not for individual product forexample General and administrative expense, Research and development expense. No change in this cost even their is closure of a product or starting of a product. common fixed costnot to be considered because it will not change.
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