CHAPTER 2 Flashcards
What is a fixed cost?
Constant costs regardless of the output of the productivity.
What is variable cost?
Variable costs depend on the level of output and activity.
What is Marginal Cost?
The cost added by producing one additional unit of priduct.
What is the Average cost?
The average cost is the total cost over the number of units.
What is Sunk cost?
Sunk cost is money already spent as a result of past decision.
What is an Opportunity cost?
Everytime u use a business resource u forgo the apportunity to use the same resource in that time in some other activity. Ex, the student travelling example
What is an incremental cost?
an incremental cost is the princple of making a choice among a set of other competing alternatives. the disfference between the the alternatives is the incremental cost.
what are recurring and nonrecurring costs?
A recurring cost is the cost that occurs at regularl intervals, or you can say its expected. while the nonrecurring costs are the cost that occur at irregular intervals such as testing a new product.
What is a cash cost?
its the cash transaction or the cash flow. if a company purchased an asset, it realizes a cash cost.
what is a lifecycle?
a project lifecycle is a process through which a project is implemented from cradle to grave. Life cycling costing key concepts, the later a design change is made, the higher the cost.
Breakeven Analysis
The breakeven analysis attempts to reflect the cost and revenue performances.QBE.
What are variable costs impacted of?
efficiency of operation, improved designs, quality safety, and higher sales volume.
Mention some costs that vary with the level of activity.
Direct Labor, material, marketing, advertising, warranty.
what is Revenue?
The total amount of money collected from selling producted or services
TC = FC + VC
Total Cost = Fixed cost + Variable Cost
