Definitions 9 Flashcards
Average cost/unit cost
The cost of producing one unit, calculated by dividing total cost by output
Accounting cost
The value of an economic resource used up in production
Direct cost
A cost which can be clearly identified with a particular unit of output
Fixed cost
A cost which does not change in output in the short run
Indirect cost/ overhead
A cost which can not be identified with a particular unit of output. It is incurred by the whole organisation or department
Long run
The time period where all factors of production are variable
Marginal cost
The cost of increasing output by one or more unit
Semi-variable cost
A cost which consists of both fixed and variable elements
Short run
The time period where at least one factor of production is fixed
Total cost
The entire cost of producing a given level of output
