Cost Concepts

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BSNS115
Sophia Lynch
Flashcards by Sophia Lynch, updated more than 1 year ago
Sophia Lynch
Created by Sophia Lynch over 4 years ago
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Question Answer
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.
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