Get Active in Our Amazing Community of Over 451,000 Peers!

Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Case Partners to connect and practice with!

How does the Consulting Q&A work?

Anyone can ask a question

Anyone can write an answer

Upvotes let answers rise to the top

Banking - fixed and variable costs

Banking costs fixed costs variable costs

Most recent answer on Aug 30, 2022

Lucie

Expert

10+yrs recruiting & BCG Project leader

Lucie

Expert

gave the best answer on Aug 20, 2022

10+yrs recruiting & BCG Project leader

Hi there, I am not banking expert, but I would guess banking has probably very low variable cost and high fix cost and it declines with scale. I guess most cost can be saved with AI and digitalization, allowing banks t ... (read entire answer)

6
Answers

3.4 k
Views

25
Total Upvotes

on Aug 30, 2022 on Aug 30, 2022
Last Activity

Are labor, spoilage and advertising fixed cost?

fixed costs

Most recent answer on Aug 01, 2021

gave the best answer on Aug 01, 2021

Hi there, Salaried labor is a fixed cost. Hourly labor is a variable cost. Spoilage is a fixed cost. Fixed costs AND variable costs grow as the company gets bigger. Please don't get confused by the word "Fixed". Fix ... (read entire answer)

2
Answers

686
Views

19
Total Upvotes

on Aug 01, 2021 on Aug 01, 2021
Last Activity

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

fixed costs profitability profitability analysis variable costs

Most recent answer on Jul 31, 2021

gave the best answer on Jul 30, 2021

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 an ... (read entire answer)

2
Answers

906
Views

17
Total Upvotes

on Jul 31, 2021 on Jul 31, 2021
Last Activity

Looking for exciting discussions from the community?

FC VC items

fixed costs

Most recent answer on Nov 03, 2020

Anonymous gave the best answer on Nov 02, 2020

This depends on the case context and cannot be answered in general, e.g. Maintaining an aircraft once a month independent from flight hours => fixed; maintaining manufacturing equipment every 1000 hours of operat ... (read entire answer)

6
Answers

1.2 k
Views

31
Total Upvotes

on Nov 03, 2020 on Nov 03, 2020
Last Activity

Inventory Costs: how to segment?

Cases fixed costs Fixed or Variable inventory Practice cases variable costs

Recent activity on May 23, 2020

gave the best answer on May 23, 2020

Hi there, I'm going to provide you with FC vs VC segmentation, because this is the classic form. But, remember, this isn't the end all be all! If the case is about addressing these with a combination of technology a ... (read entire answer)

3
Answers

2.2 k
Views

13
Total Upvotes

on May 23, 2020 on May 23, 2020
Last Activity

Airlines cost segmentation

airline Airline Economics costs fixed costs segmentation variable costs

Most recent answer on Feb 28, 2020

Luca

Expert

BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Luca

Expert

gave the best answer on Feb 28, 2020

BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello Theo, Thi is fine, but consider that the differentiation between fixed and variable costs is fundamental when you have to do some considerations involving variable volumes. Best, Luca

6
Answers

2.5 k
Views

10
Total Upvotes

on Feb 28, 2020 on Feb 28, 2020
Last Activity

Indirect costs per unit remain constant implications

Chewing gum fixed costs profitability analysis

Most recent answer on Dec 12, 2019

Luca

Expert

BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Luca

Expert

gave the best answer on Dec 12, 2019

BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello Marcelo, You raised a good point but if you read carefully the text, the problem of your client is not the absolute value of the margin, but the profit margin. For this reason, the fact that incidence of the ind ... (read entire answer)

1
Answer

3.1 k
Views

3
Total Upvotes

on Dec 12, 2019 on Dec 12, 2019
Last Activity

What's the difference btw opex, capex and fixed costs?

capex casepartnerswanted fixed costs opex

Most recent answer on Sep 05, 2019

gave the best answer on Sep 05, 2019

CAPEX = Capital Expenditures - expenditures aimed, for example, at obtaining Fixed Assets (investments in building assets which willl be used as core for operations) OPEX = Operational Expenditures - expenditures aime ... (read entire answer)

1
Answer

2.6 k
Views

5
Total Upvotes

on Sep 05, 2019 on Sep 05, 2019
Last Activity

McKinsey: How to best sub-structure fixed costs?

BCG Cost reduction fixed costs McKinsey

Recent activity on Feb 27, 2019

Guennael

Expert

Ex-MBB, Experienced Hire; I will teach you not only the how, but also the why of case interviews

Guennael

Expert

gave the best answer on Feb 26, 2019

Ex-MBB, Experienced Hire; I will teach you not only the how, but also the why of case interviews

There is no one best way. Industries will usually have a very significant fixed cost component, Services often a larger variable cost component - but inside FC & VC, a number of parameters will come into play depend ... (read entire answer)

3
Answers

3.3 k
Views

2
Total Upvotes

on Feb 27, 2019 on Feb 27, 2019
Last Activity

Brainstorming: What are important costs that should be known?

BCG fixed costs MBB McKinsey variable costs

Recent activity on Jan 30, 2019

Sidi

Expert

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 350+ candidates secure MBB offers

Sidi

Expert

gave the best answer on Jan 30, 2019

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 350+ candidates secure MBB offers

Hi! It really depends on the industry and even more on the business model! The above list seems to be quite centered around producing and selling a product. If you are considering service businesses, the cost buckets ... (read entire answer)

3
Answers

3.0 k
Views

7
Total Upvotes

on Jan 30, 2019 on Jan 30, 2019
Last Activity

Classifying Costs

costs fixed costs

Recent activity on Oct 12, 2018

Anonymous gave the best answer on Oct 12, 2018

Hi, very often in these questions, people seem to confuse the nature of costs (fixed or variable) with the distinction between investment and costs (and cash out, which is a topic for another post). So: Capital ... (read entire answer)

4
Answers

3.2 k
Views

1
Total Upvotes

on Oct 12, 2018 on Oct 12, 2018
Last Activity

Fixed or Variable Cost

fixed costs variable costs

Recent activity on Oct 12, 2018

Benjamin

Expert

ex-Manager - Natural and challenging teacher - Taylor case solving, no framework

Benjamin

Expert

gave the best answer on Oct 12, 2018

ex-Manager - Natural and challenging teacher - Taylor case solving, no framework

Hi, You have two differentiate the type of employees here : - Blue collars : directly related to production volume > variable - white collars : blue collar management (semi-variable) and other indirect and sup ... (read entire answer)

3
Answers

2.4 k
Views

3
Total Upvotes

on Oct 12, 2018 on Oct 12, 2018
Last Activity

Do you have a question for our consulting experts, too?

Fix & Variable Costs if you do not know the industry well - Ask?

fixed costs Fixed or Variable variable costs

Recent activity on May 02, 2018

Sidi

Expert

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 350+ candidates secure MBB offers

Sidi

Expert

gave the best answer on Apr 30, 2018

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 350+ candidates secure MBB offers

Hi Anonymous, an interviewer would appreciate if you apply some common sense to the question. You can by all means state that you are unfamiliar with this particular industry, but that you extrapolate from XYZ industr ... (read entire answer)

4
Answers

3.6 k
Views

12
Total Upvotes

on May 02, 2018 on May 02, 2018
Last Activity

Some non traditional cost cutting measures in manufacturing facilities

fixed costs variable costs

Recent activity on Apr 04, 2018

Anonymous gave the best answer on Apr 02, 2018

Some ideas below: 1) Assess factory floor layout and redesign according to lean principles (this can be done at different levels of cost) to increase yield, reduce switching costs 2) Manufacture during low electrici ... (read entire answer)

3
Answers

2.9 k
Views

7
Total Upvotes

on Apr 04, 2018 on Apr 04, 2018
Last Activity

Fixed vs variable costs

fixed costs Fixed or Variable variable costs

Recent activity on Mar 26, 2018

Anonymous gave the best answer on Mar 26, 2018

The costs you are talking about is also known as CAC - customer acquisition costs. There is literally *no* business where CAC is zero. You spend salespeople's time, marketing $s, advertising, or other $s to acquire this ... (read entire answer)

5
Answers

4.6 k
Views

11
Total Upvotes

on Mar 26, 2018 on Mar 26, 2018
Last Activity

Welche Kostentreiber kommen am häufigsten vor?

fixed costs Fixed or Variable Kosten variable costs

Recent activity on Mar 20, 2018

Sidi

Expert

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 350+ candidates secure MBB offers

Sidi

Expert

gave the best answer on Mar 20, 2018

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 350+ candidates secure MBB offers

Hallo Anonym, also um da mal ein wenig Ordnung reinzubringen muss man zunächst einmal klarstellen, dass es unterschiedliche Arten gibt, Kosten zu klassifizieren. Die lassen sich dann gegebenenfalls per Matrix o.Ä. übe ... (read entire answer)

1
Answer

3.9 k
Views

10
Total Upvotes

on Mar 20, 2018 on Mar 20, 2018
Last Activity

Basic Cost Frameworks?

Cost reduction cost-benefit analysis fixed costs profitability cost reduction variable costs

Recent activity on Mar 08, 2018

Vlad

Expert

McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Vlad

Expert

gave the best answer on Mar 08, 2018

McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi, As a candidate, I've struggled a lot with cost reduction cases since most of the case books don't have them, while you can face these cases on the case interviews. This is especially relevant for McKinsey intervie ... (read entire answer)

2
Answers

4.8 k
Views

11
Total Upvotes

on Mar 08, 2018 on Mar 08, 2018
Last Activity

17 results

Consulting Q&A – Ask Questions about Your Career

In this overview, you will find all the questions asked so far by the PrepLounge community. Anyone can ask questions and write answers. Our coaches are also happy to share their expertise. If you like an answer, give it an upvote so that it rises to the top. Here you can also find our guidelines and FAQs for the Consulting Q&A.