Principles of Industrial Organization

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B. Going, p. 79.
PRINCIPLES OF COST KEEPING 123 necessary, so to speak, to the mere existence of the business, while variable expense includes all items connected with the activities of the business. Thus rents, insurance, taxes and depreciation of buildings remain practically uniform no matter what the volume of business in the shop may be; or if they change at all, it is occasionally and perhaps by large increments and then they remain stationary again for a long time. Moreover, many of them
...can never become zero no matter what the state of the business may be. Salaries of general officers and those that are not affected by a change in volume of business are also fairly fixed in character.
On the other hand expenses such as clerical help, unskilled labor, power, oil and similar operating supplies . Are affected quite sensitively by a change in the volume of business and go up and down with it though not usually in direct proportion. Thus it takes a certain minimum amount of power to turn the engine and shafting when no productive work is being accom- plished.


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