Report Example on Costs in a Wedding Event: Fixed, Variable, and Semi-Variable

Introduction

There are different types of cost which include fixed, variable, and semi-variable. The paper will differentiate the costs by giving examples of how they are applied in a wedding event.

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Fixed Cost

Fixed cost are pre-established expenses that remain the same throughout a given or specified time. Fixed cost does not differentiate with how business is performing or with output. In other words, it is an expense that an individual or organization would incur, even if the business in question is temporally closed (Kamphorst et al., 2020). For instance, in a wedding event, locational rent is an example of a fixed cost that the wedding organizing committee has to pay to accommodate everyone invited to the wedding. Additionally, in a wedding event, audio and visual services is another example of fixed costs that need to be paid so that the invitees will be in a position to see and hear the wedding proceedings. Lastly, a set-up which includes stage planning, lighting, speakers, and performer fees is another example of a fixed cost that a wedding organizing committee has to pay for the wedding event to take place.

Variable Costs

Variable costs change directly with the output given. For instance, if the output is zero, it means that the variable cost will as well be zero. The accumulated variable cost to an operating business is calculated by multiplying the entire quantity of output and the variable cost per unit of output (Liu & Tyagi, 2017). For example, in a wedding event, the invitee's travels fees will vary depending on their proximity to the wedding setting. Accommodations are another variable cost since the invitees may decide to pay for varying accommodating fees depends on their financial capabilities. Refreshments which includes sodas, water, and liquor, is another type of variable cost that varies depending on how the wedding organizing committee has budgeted on the event.

Semi-Variable Costs

Semi-variable costs are those cost that an individual or organization has to pay on a monthly basis. Any amount higher than the minimum depends on the amount of revenue that an individual or organization earn (Liu & Tyagi, 2017). For instance, in a wedding event, the semi-variable costs include the service staff- a wedding committee has to pay a certain amount of money for people to perform different functions such cooking, setting-up the speakers, and lightings. However, as the invitees count increases, the committee will be charged based on that number.

Conclusion

Event license is another semi-variable cost that depends on the number of people invited and the cost of equipment in the event. Lastly, insurance license is another type of semi-variable cost that the wedding committee has to pay to insure the people and the equipment in the event.

References

Kamphorst, J., Mendys-Kamphorst, E., & Westbrock, B. (2020). Fixed costs matter even when the costs are sunk. Economics Letters, 109428.
https://doi.org/10.1016/j.econlet.2020.109428

Liu, Y., & Tyagi, R. (2017). Outsourcing to convert fixed costs into variable costs: A competitive analysis. International Journal of Research in Marketing, 34(1), 252-264.
https://doi.org/10.1016/j.ijresmar.2016.08.002