Also, your biggest non variable cost is your rent.
Non-product variable costs increased 40% from 2005 to 2007, while fixed costs increased 54% from 2005 to 2007, largely due to increased salary expenses for central administrative staff whose contributions were provided in-kind in the first year only.
Nurse-dispenser bonuses, determined by product sales volume, are the largest portion of non-product variable costs, representing 75% of these costs in 2007 (table 1) and averaging 634, 869, and 942 KGS per nurse per month for 2005, 2006, and 2007, respectively.
We have included: capacity costs (personnel and fixed assets) and costs of non-capacity factors (variable costs) such as drugs, disposable devices, energy, prosthesis, etc. [15].
In 2007, product variable costs, non-product variable costs, and non-product fixed costs comprise 70%, 12%, and 18% of total costs, respectively.
Non-stay related variables costing model.
Therefore, all stay related variables were excluded in a second model (non-stay related variables costing model – NSRV-CM), again with total costs as the dependent variable.
The variable costs i.e. direct medical, direct non-medical and indirect costs of the two treatment arms were measured using micro-costing technique [ 11].
Kosmo explains fixed and variable costs.
Figure 3: Average variable costs (AVC) and marginal variable costs (MC) in relation to output.
Only the variable costs are considered.
