Assignment : Discussion-Cost Types

It is first thing Monday morning and your boss requested your presence ASAP. As you go to your meeting without even getting a second cup of coffee, you ponder the objective of the meeting.

You believe it must have something to do with the fact that your visit to Harmony Organs has been moved up. There is a lot of pressure to cut costs and Linda Kaye wants to continue with the next step.

Mickelle Bride, the CEO of Harmony Organs, is often called the ear of the company. She has been able to craft pipes with overtones and harmonics that would make Stradivarius cry.

Linda Kaye would like you to explain to Mickelle the importance of understanding the different cost types (fixed cost, variable cost, and semi-variable cost) when undertaking cost-cutting measures.

Also use an example to explain to her the importance of cost estimation. Mickelle is very good at math so she will be interested in the accuracy of visual fit, high-low, or least-squares regression.