Chapter 26, Costs revenue and Profit Flashcards

1
Q

Fixed costs

A

costs do not vary with the level of output ( factory, machinery, business rates)

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2
Q

Overheads/indirect costs

A

costs that cannot be attributed to a particular unit of output

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3
Q

Direct costs

A

costs that are directly attributed to a unit output ( raw materials

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4
Q

Variable Costs

A

costs that change in proportion to the level of goods or services a business produces

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5
Q

Total Costs

A

fixed costs + variable costs

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6
Q

Unit Costs

A

the cost of producing one unit = total / output

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7
Q

Marginal costs

A

the coats of production one extra unit

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8
Q

Opportunity Costs

A

what a business could of spent money on

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9
Q

Standard Costs

A

costs that a business would expect to have in the production of a product

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10
Q

Abortion Costs

A

where all indirect costs and overheads are absorbed by different costs centres

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11
Q

Contribution

A

is the selling price of a product minus the variable costs of producing it

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