Costs Flashcards
1
Q
State three types of costs.
A
- Fixed costs.
- Variable costs.
- Total costs.
2
Q
What are fixed costs?
A
A fixed cost is an expense that does not change when sales or production volumes increase or decrease.
3
Q
What are variable costs?
A
Variable costs are expenses which change with output, they increase and decrease with output.
4
Q
What are total costs?
A
The overall cost of production, which includes both fixed and variable components of the cost.
