Monty Kuxhaus

Business owners, accountants, and sales people don’t always agree on the definitions of business terms such as fixed cost and variable cost, and therefore they see business opportunities in different ways. Evaluating every new business opportunity in a way that includes the full burden rate (using fixed costs) seems like a good idea, but this isn’t always the best way to go. If the company is already paying all of its fixed costs, why not use variable costs to analyze a new piece of business?