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Anonym A

am 30. Juli 2021

Global

How to know when to use (fixed & variable cost) vs. (direct & indirect cost)?

May I know, how can I learn to know when to use (fixed & variable cost) vs. (direct & indirect cost) under the cost branch?

Thank you so much

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Ian

Coach

am 30. Juli 2021

Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi there,

Ultimately, it depends on the case. Moreover, I personally actually don't like either..."I'd like to segment by FC and VC" and "I'd like to segment by direct and indirect costs" is just incredibly generic and adds no value!

Rather, break it down by what matters. Thematically, what major costs are here and what's a systematic approach to looking at costs.

Some helpful related Q&As:

https://www.preplounge.com/en/consulting-forum/direct-and-indirect-instead-of-fixed-and-variable-6272

https://www.preplounge.com/en/consulting-forum/inventory-costs-how-to-segment-6861

https://www.preplounge.com/en/consulting-forum/structure-breakdown-for-costs-7963

Francesco

Coach

am 31. Juli 2021

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success: ➡ interviewoffers.com | Ex BCG | 10Y+ Coaching

Hi there,

You may use any of the two as they are both a MECE way to structure costs. In the end, you should use the one that helps you to brainstorm more easily the costs for a particular case, as after that division you will have to identify costs for each category.

Best,

Francesco