Cost Concepts

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How many marks are there for Information Systems, Financial Accounting and Cost Accounting?	IS = 25 marks FA = 25 marks CA = 50 marks
In management accounting how are costs classified?	Classify our costs due to BEHAVIOUR .
What is a variable cost?	A cost that varies with the rate of activity. E.g. hourly wages
What is a fixed cost?	A cost that does NOT vary with the rate of activity. E.g. Salary
Management accounting is about...	planning and control.
Total Cost = ?	Fixed Cost + (Variable Rate x Activity)
What will variable cost at a variable rate look like?	An upward angled line from left to right. @ Variable Rate VC = X amount per unit
What will variable cost as a total look like?	A straight line across. @ total VC = X amount
Never do what to fixed costs?	UNITISE!!!
What does total fixed costs look like?	A straight line across.
What are two types of variable costs?	1. Raw Materials 2. Direct Labour
What together = prime costs	1. Raw Materials 2. Direct Labour
What is 'relevant range'?	Within a range, things have a certain behaviour pattern.
What are stepped costs?	Different fixed costs have different relevant ranges. As you step up on the graph, this range can get bigger.
Image: Screen+Shot+2020 06 07+At+11.26.15+Pm (binary/octet-stream)	Image: Screen+Shot+2020 06 07+At+11.25.50+Pm (binary/octet-stream)

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	Erstellt von Sophia Lynch vor mehr als 4 Jahre