Chapter 28 Business- Costs

Chuka Munkh-Achit
Flashcards by Chuka Munkh-Achit, updated more than 1 year ago
Chuka Munkh-Achit
Created by Chuka Munkh-Achit almost 5 years ago
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AS - Level Business Studies (Unit 5 Flash cards for Key Terms) Flashcards on Chapter 28 Business- Costs, created by Chuka Munkh-Achit on 04/24/2016.

Resource summary

Question Answer
Direct costs These costs can be clearly identified with each unit of production and can be allocated to a cost centre
Indirect costs Costs that cannot be identified with a unit of production or allocated accurately to a cost centre
Fixed costs Costs that do not cary with output in the short run
Variable costs Costs that vary with output
Marginal costs The extra cost of producing one more unit pf output
Break-even point of production The level of output at which total costs equal total revenue - neither a profit nor a loss is made
Margin of safety The amount by which the slaes level exceeds the break-even level of output
Contribution per unit Selling price less variable cost per unit
Cost centre A section of a business, such as a department, to which costs can be allocated or charged
Profit centre A section of a business to which both costs and revenues can be allocated -so profit can be calculated
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