The two costs of productions that Ball bearings, Inc. could face is Fixed and variable cost of production.
The fixed cost, in this case, would be the cost of machines or equipment, the cost of the factory, the cost of the maintenance of the machine required to create ball bearings. However the variable cost is the cost of the material used in the production, the salary of the workers or employees and the utilizes that are needed to produce the ball bearing
Variable cost refer to expenses that change based on the company's production output. A company production cost increases or decreases based on its production output or volume. The variable costs go up and come down or fall as the volume of production increases.
A very good example of variable costs is the cost of materials used and packaging
However, a fixed cost refers to the cost that doesn’t change regardless of the number of goods that are sold or produced by a company. They are expenses that must be paid by a company.
The two types of cost that companies can have are:
The fixed cost and the variable cost determines that a company’s total cost.
Some examples of fixed cost are:
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