COST CONCEPTS DEFINITIONS

Question 1

define a cost as a reduction in the value of an asset for
the purpose of securing benefit or gains.

Answer 1

accountants

Question 2

are those that are normally unaffected by changes in sales volume. Ex. Taxes & rents.

Answer 2

fixed cost

Question 3

cannot normally be changed in short term such as fixed cost like rent, interest on a mortgage & taxes

Answer 3

uncontrollable cost

Question 4

are those that are clearly related to business volume.
As business volume increases, variable cost will increase.

Answer 4

variable cost

Question 5

can change in the short term like variable cost.

Answer 5

controllable cost

Question 6

includes salaries and wages often referred to as labor
cost

Answer 6

payroll cost

Question 7

may be food & beverage portion as in the cost of one item or hourly unit of work.

Answer 7

unit cost

Question 8

refer to the cost of materials and labor.

Answer 8

prime cost

Question 9

– defined as revenue resulting from exchange for a product (F&B,
service) for value (money)

Answer 9

sales