Classifying costs, break-even analysis, contribution and margin of safety, budgeting and variance analysis, and cost and profit centres.
Classifying costs
Fixed costs — do not change with output (rent, salaries).
Variable costs — change directly with output (raw materials).
Total cost = fixed + variable; average (unit) cost = total cost ÷ output.
Direct costs are traceable to a product; indirect costs (overheads) are not.
Viewing only
This content is free to read on superexams.com and cannot be printed or downloaded.
Read the full note, free
Create a free account to read this note in full. Every free account gets 2 complete revision notes, no card needed.