Cost Clasification And Cost Behaviour Flashcards
Cost behaviour
The way a cost changes as production quantity or activity lvl changes
Direct costs
Can be directly identified with a unit of ordination or service
Fixed costs
Costs that do no vary with changes in production lvl
High-low method
A method for estimating the fixed and variable parts of a semi-variable cost
Indirect costs
Cannot be directly identified with a unit of production or service
Overheads
Indirect costs (i.e. Indirect materials, labour and expenses)
Period costs
Cost which relate to a time period rather than the output of product or services
Prime cost
The total of direct costs
Product costs
A costs of a finished product made from its cost elements
Production cost
The total manufacturing costs
Relevant range
The relevant range of a fixed cost is the range of activity within which the cost does not change
Semi-variable costs
Costs that have both a fixed element and a variable element
Stepped costs
Costs that are fixed over a certain range, but when output increases beyond a certain lvl, there will be a sudden jump in cost to s higher fixed amount
Variable costs
Vary according to the lvl of production
