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Memo to HR
MEMO
Attn: HR Manager
From: James Bauernfeind
There is an understanding that HR is struggling with current budget discussions. In an attempt to help HR understand the terminology within the discussions, this memo has been compiled. Please read through this memo, and if there are further questions do not hesitate to ask in the budget meetings.
Our business deals with fuel, fuel pricing and management of the fuel for merchants and fleets. I would say that it is possible that each of the cost variables can be applied in some way to our business as it is a diverse business dependant on outside products. Fixed costs are normally costs that the business has that are normal every day; have to pay them whether you make money or not (Business Link, 2007). This could include the expense of electric, water, and phone to keep the business running. It is not that the amount does not change, it is that it is a given that it has to be paid or the business simply could not operate, or have a place to work should the rent not be paid. I don't know of a business that does not have a fixed cost.
FleetOne (FleetOne Inc, 2007) has many fixed costs. Variable costs can be seen as expenses that change as the business changes in sales or other activities of the business (Investorwords.com, 2007). These costs will be above and beyond the fixed costs should the company have activity that requires the use of more electricity (as an example) to sustain the raise in production. FleetOne does not have many variable costs, as we are not a production line, or a company that has a need to speed up and slow down production. The only thing I could see being a variable cost for our company is ...