Chapter 26, Costs revenue and Profit Flashcards
Fixed costs
costs do not vary with the level of output ( factory, machinery, business rates)
Overheads/indirect costs
costs that cannot be attributed to a particular unit of output
Direct costs
costs that are directly attributed to a unit output ( raw materials
Variable Costs
costs that change in proportion to the level of goods or services a business produces
Total Costs
fixed costs + variable costs
Unit Costs
the cost of producing one unit = total / output
Marginal costs
the coats of production one extra unit
Opportunity Costs
what a business could of spent money on
Standard Costs
costs that a business would expect to have in the production of a product
Abortion Costs
where all indirect costs and overheads are absorbed by different costs centres
Contribution
is the selling price of a product minus the variable costs of producing it