Cost Behavior and Product Liability in Business
This content delves into the concepts of cost behavior, including variable and fixed costs, as well as attributable costs in business operations. It also discusses strict product liability in tort cases, focusing on merchant responsibilities and punitive damages in instances of product defects. The information provides valuable insights for business owners and legal professionals alike.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
Green Cast, inc: Student Coaching Notes 1
Questions 1, 2, & 3: Cost Behavior Variable Costs: a cost whose total changes directly and proportionally with volume. Variable costs are constant on a per unit basis. For example: a necklace requires $235 each for gold, clasp, and stone. The materials cost is $235 for one necklace and $23,500 if we produce 100 units. 2
Questions 1,2, & 3: Cost Behavior Fixed Cost: is constant in total regardless of the number of units produced within the relevant range of operations or within a time period. Committed fixed costs are costs like depreciation where we have purchased a plant asset and will spread its cost over time. Managed fixed costs are costs like marketing or research and development that we have decided to incur based on a strategic budgeting or decision making process. 3
Questions 1,2, & 3: Attributable Cost Attributable Cost is a cost that is incurred to benefit a product, a department, or other organizational unit, that could be avoided if the unit or product did not exist. This is not a short run concept. Costs that are attributable to a product or organizational unit may have to be managed and eliminated. Consider the physical plant and machinery devoted to manufacturing a product. If the product is eliminated from the line, ultimately the equipment and plant will have to be sold or adapted to do something else productive. 4
Question 4: strict product liability in tort Defendant is a Merchant Selling the Underlying Product for Use or Consumption The Product was Defective: Marketing Defect, Design Defect Causation 5
Question 4: Punitive Damages Compensatory vs. Punitive Damages Standard for Granting Punitive Damages Granted only in exceptional and egregious instances Defining Egregious A deliberate act or omission with knowledge of a high degree of probability of harm and reckless indifference to consequences Egregious Conduct in Product Liability Cases When a manufacturer has knowledge that his product poses a grave risk to the health or safety of itsusers and fails to take any protective or remedial action 6
