31.2 Approaches to costing Flashcards
1
Q
Profit centers
A
A section of a business to which both cost and revenue can be allocated, so profit can be calculated.
2
Q
Average cost
A
Total cost divided by the number of units produced.
3
Q
Full costing
A
A method of costing in which all indirect and direct costs are allocated to the products, services or divisions of a business.
4
Q
Contribution costing
A
Costing method that allocates only direct cost to cost centres and profit centers, not overheads.
5
Q
Marginal cost
A
The additional cost of producing one or more unit of output.
