Types of Costs Flashcards
those unaffected by changes in activity level over a feasible range of operations for the capacity or capability available
fixed cost
noncash cost; represents recovery of past expenditures over a fixed period of time
book cost
involves payment in cash and results in cash flow
cash cost
additional cost that results from increasing the output of a system by one or more unit
incremental cost
one that has occurred in the past and has no relevance to estimates of future costs and revenues
sunk cost
cost of the best rejected opportunity and is hidden/implied
opportunity cost
repetitive and occur when a firm produces similar goods and services on a continuing basis
recurring cost
nonrepetitive, even though the total expenditure may be cumulative over a relatively short period of time
nonrecurring cost
can be reasonably measured and allocated to a specific output or work activity
direct cost
difficult to allocate to a specific output
indirect cost
summation of all costs (recurring and nonrecurring), related to a product, structure, system, or service during its lifespan
life-cycle cost
capital required for most activities of the acquisition phase
investment cost
funds required for current assets needed for start-up and subsequent support of operation activities
working capital
includes many of recurring annual expense items associated with operation phase of life cycle
operation and maintenance cost
non-recurring costs of shutting down the operation
disposal cost
