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8 Cards in this Set
- Front
- Back
Direct costs |
A cost that directly attributes to making a product I.e. materials |
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Indirect costs/overheads |
Costs that do not directly go into making the product I.e. electricity for offices |
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Fixed costs |
Costs that do not change with output I.e. salaries |
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Variable costs |
Costs that change with the level of output I.e. materials |
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Total costs |
Fixed costs + variable costs |
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Marginal costs |
The cost of producing one more product |
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Average costs |
Total cost ÷ output |
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Why it's calculated |
- Accurate budgeting and forecasting - to get an accurate selling price - decide whether products are profitable or not |