Eslam Mohamed Helmi
Last answered:

20 Jun 2023

 Posted on:

15 Jun 2023
0

COGS Affected by Non-Financial Factors

in Introduction to Business Analytics / Regression analysis

Regrding the example given to explain how COGS can increase due to non-financial factors like stoppages of production lines, actually I could not understand how such a problem will not be reflected in the cost of maintenance [more breakdowns means more maintenance], utilities cost [more breakdowns means more utility cost per unit] 


Can someone please explain this?

1 answers ( 0 marked as helpful)
Ned Krastev
Instructor
Posted on:

20 Jun 2023
0

Hi Eslam,

Good to hear from you!

A stoppage could be cheap to repair, but if technicians don't come on time then you will have a much higher opportunity cost due to missing production. Hope this makes sense.

Best,

Ned

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