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Maintenance costs fixed or variable?

Fixed or Variable
New answer on Jun 30, 2021
7 Answers
5.0 k Views
Anonymous A asked on Jun 22, 2021

Are maintenance costs variable since it's typically on a per equipment basis?

(edited)

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Francesco
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replied on Jun 23, 2021
#1 Coach for Sessions (4.000+) | 1.500+ 5-Star Reviews | Proven Success (➡ InterviewOffers.com) | Ex BCG | 10Y+ Coaching

Hi there,

Maintenance could be either a fixed or variable cost.

If maintenance is due for each unit produced and it has a cost per unit, then it would be a variable cost. If it is independent of the amount produced (eg the client pays a fixed fee per year for general maintenance of a factory), then it would be a fixed cost.

Best,

Francesco

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Ian
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replied on Jun 23, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Not so fast.

Variable costs are per unit produced, not just per unit.

If my maintenance costs go up x $ for every single extra unit produced, they are variable. In reality, this isn't actually how it works (there's a general wear and tear expected per year), so maintenance costs are generally viewed as fixed.

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Anonymous B replied on Jun 22, 2021

YES!

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Marco-Alexander
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updated an answer on Dec 01, 2021
Former BCG | Case author for efellows book | Experience in 6 consultancies (Stern Stewart, Capgemini, KPMG, VW Con., Hor

.

(edited)

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Henning
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replied on Jun 27, 2021
Bain | passed >15 MBB interviews as a candidate

Both. Some maintenance is based on metrics that are tied to actual production (e.g. a machine needs to be fully overhauled every 10.000 running hours). Other maintenance is fixed (the machine needs to be maintained once per year). 

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Clara
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replied on Jun 24, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

It can be both, depends on the context. Do you want to post here the problem so we can help you? Cheers, 

Clara

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Adi
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replied on Jun 23, 2021
Accenture, Deloitte | Precision Case Prep | Experienced Interviewer & Career Coach | 15 years professional experience

Have a look at this for detailed answer to same question: https://www.preplounge.com/en/consulting-forum/fc-vc-items-8370

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