175 – 265 words
Cite at least one peer-reviewed reference
Respond to the following:
Many of the costs Disney has relate to their studio and its existence regardless of how much they produce. These costs are fixed costs, as they do not change with production levels. Disney has made great use of this approach by releasing their products in a way that these high fixed costs are spread across a very large number of units. In this case, making the movie would use job costing as you said, but releasing the DVD would more likely use process costing, as each DVD is the same as every other one for that title. In many ways, the cost of the movie becomes fixed, while the distribution of the movie becomes variable.
Does the perspective on the product make a difference in how we account for it internally? How has the Internet changed our variable costs?
HGexperts.com. (2021). The Basics of Film Finance – HGExperts.com. Hgexperts.com. https://www.hgexperts.com/expert-witness-articles/the-basics-of-film-finance-7309
8/10/22, 5:52 PM
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