From the course: Introduction to Business Analytics

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Cost data

Cost data

From the course: Introduction to Business Analytics

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Cost data

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- Studying the cost your organization is incurring enables you to understand the real expense of doing business. Oftentimes small expenses can fall through the cracks which is why it's very important to study this kind of data. There are two basic forms of costs that your organization will face. Fixed and variable. Fixed costs will stand stable whether you're killing it sales wise or not a single deal has come through. An example of this is the overhead you pay to rent your office. The other kind of cost is variable and this scales up and down, depending on another factor. For example, raw materials will fluctuate based on how many orders are coming through the door. One of the biggest values of studying cost data is that empowers you to think strategically about your pricing model. You want to maximize the amount of profit which is calculated by price minus variable costs. In most cases, you want your product or…

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