A1 Definition of cost ,1

Question 1

fixed costs,

Answer 1

Fixed costs are costs which don’t fluctuate, therefore the cost remain the same the same, regardless of the changes in the business.

Question 2

variable costs,

Answer 2

Variable cost are costs which fluctuate, therefore the cost can vary depending on the changes in the business

Question 3

semi-variable costs,

Answer 3

A cost that is made up a combination of fixed and variable costs

Question 4

Direct cost

Answer 4

The cost a business directly pays to produce a good or provide a service or to buy a wholesale product for resale

Question 5

InDirect cost

Answer 5

Indirect cost are general business and administrative expenses that are not direct related to the production of goods or the provision of services. They are opposite to direct costs.

Question 6

Step costs

Answer 6

Step costs are expenses that remain consistent for a particular level of activity but rise or drop when a certain threshold is reached

Question 7

Marginal Costs

Answer 7

The marginal cost Is the change in total production cost that comes from making or produce one additional unit

Question 8

Absorption Costs

Answer 8

Full costing or the full costing method

Question 9

Unit cost

Answer 9

Unit costs are a company entire costs to create,store and sell one unit of a specific item or services are known as the unit cost

Question 10

Total cost

Answer 10

Total cost is the sum of all fixed and variable costs at a level of output.

Question 11

Cost accounting

Answer 11

Cost accounting refers to the tracking and monitoring of revenue and expenditure in a business.

Question 12

Management accounting

Answer 12

Management accounting is the area of accounting where decisions and strategy are formed.