Engineering Economics, Marketing and Management

Question 1

Costs which vary with the volume of production

Ex. Cost for buying production materials.

Answer 1

variable cost

Question 2

Costs which do not change regardless of the volume of production.
Ex. Cost for paying the tax and insurance of the company

Answer 2

Fixed cost

Question 3

Refers to the additional costs or revenue that will result from increasing the output of a system by one or more units.
Ex. Cost for the training of the employees

Answer 3

Incremental cost

Marginal cost

Question 4

Is often used to mean all expenditures that are not direct costs.
Ex. Cost for the salary, incentives of the employees and other additional expenses of the company.

Answer 4

Overhead cost