Reduce the Rate of Cost for the Input Used to Produce the Output
Use the same type of input and the same activities, but pay less for the unit of input employed in producing the output. A reduction in rate is equivalent to a reduction in the number of inputs for the same ICD. For example, if a person who makes $10 per hour could produce the same amount of output as a person making $20 an hour, the substitution of the $10 person for the $20 person in the process would be equivalent to cutting the number of people required to do the work by 50%.
D. Use subsidies offered by third parties to reduce total rate:
While the company may pay the regular price to the vendor of the product, subsidies available in the market place may reduce this effective rate by offsetting part or all of the purchase price.
Use government sponsored programs:
Tax reduction programs
|1||0||2007||Lobbying and legislation has made it easier and cheaper for small companies to offer health insurance to their employees. Consumer-directed- plans have high deductibles that work with health savings accounts or health reimbursement arrangements. With an HRA, an employer can set aside money to help employees meet higher deductibles. The money spent is tax-deductible to the employer.|
|2||1521||2007||As housing costs rise, some developers are using modular housing to assemble affordable communities. The move is driven by the cost of labor and the need to build houses quickly. Developers may receive federal affordable-housing tax credits that they pass on to investors in exchange for financing.|
|3||2082||2007||As energy costs rise, many industries have been forced to make gains in efficiency. However, the process is complicated by the fact that companies are often reluctant to make big investments in energy savings. Heineken responded to the Netherland's strict environmental policies by negotiating deals with the government. It received tax breaks when it reduced energy use and would face penalties if it failed to do so. Heineken hopes to improve usage at breweries worldwide.|
|4||5999||1986||Wometco stopped buying its vending machines and began leasing them from banks that owned the machines. The owners got the investment tax credits and rapid depreciation. Wometco got money on good terms.|
|5||6061||2004||Credit unions, because they're nonprofits, are able to offer lower rates and fees than banks. The average rate on a 4-year car loan is 4.68% at credit unions compared with 6.46% at banks. However, banking at a credit union has its drawbacks and most won't have a widespread branch or ATM network.|
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