Costs of Production Bank of America has been focusing on lowering their costs and since 2013 their total expenses have dropped by almost 14.5 million thanks to their efforts. Even with their attempts there was one increase which happened in the 2013-14 financial year. Before the increase 2013 had a cost of 69,214 million which increased to 75,117 million. The 5.9 million increase during that financial year was due to litigations in their other expenses category. After that in the 2014-15 financial year they decreased personnel costs by “$919 million as we continue to […]reduce headcount and achieve cost savings.” (BofA,2015). Since 2013 their personnel costs have lowered from 2013s 34,709 million to 31,642 million in 2017. “Occupancy decreased $167 million primarily due to our focus on reducing our rental footprint.” (BofA,2015). From 2013s 4475 million to 4009 million in 2017. Despite the decrease and savings occurring in their occupancy department they have opened 9 new financial centers to have a grand total of “4,500 financial centers throughout the United States”(BofA,2017) . The only …show more content…
For banking their fixed costs are the occupancy, equipment and general operating expenses. The reason for this is that occupancy, despite its decreasing cost is still needed. The equipment are fixed as they are purchasing them, and the general operating expenses which are usually different government legislations or fees that must be paid regardless of how the business is faring. The variable costs such as personal, marketing and telecommunications are changing. They usually change by lowering but marketing shows that they can still increase. The variable costs change rather quickly and often so for BofA they prefer to keep them towards the lower end. If the costs rise, they will cut down wherever they can to make sure they remain creating