Types Of Costs Flashcards
1
Q
What is a stepped cost
A
A cost that remains constant in total for a limited range of output volume, and then moves to various higher amounts for higher volume levels
2
Q
What is a variable cost
A
When the total cost varies in direct proportion to the level of activity.
3
Q
What is a fixed cost
A
When the total cost does not change when the level of activity changes
4
Q
What is a semi variable cost
A
When the total cost is made up of a variable part and fixed part
5
Q
What is interpolation
A
When you use a pattern of cost behaviour to calculate costs for a level of activity within a given range
6
Q
High - low method
A
Cost / no of units = variable cost
