Costs

Question 1

Total Units Cost Calculation

Answer 1

= Total Fixed Costs (F) + Total Variable Costs (V)

Question 2

Total Variable Cost Calculation

Answer 2

= Variable Cost/product (v) * # of products (q)

Question 3

Progressively Variable Costs

Answer 3

Increase in Costs > Increase in Production

Question 4

Linear Variable Costs

Answer 4

Increase in Costs = Increase in Production

Question 5

Regressively Variable Costs (Economies of Scale)

Answer 5

Increase in Costs < Increase in Production

Question 6

Direct Costs

Answer 6

Costs that can be directly attributed to a product or service

Question 7

Indirect Costs (Overhead Costs)

Answer 7

Costs that are incurred for the benefit of various products or services

Question 8

Homogenous Production

Answer 8

Production of only 1 product or service

Question 9

Heterogenous Production

Answer 9

Production of multiple products or services

Question 10

Waste

Answer 10

Raw Materials wasted in production process

Question 11

Scrap

Answer 11

Finished Products that have failed Quality Control

Question 12

Gross Materials for production Calculation

Answer 12

= Net material (kg) / (100% - %Waste)

Question 13

Total Material Costs

Answer 13

= Gross Costs of Materials - Waste Yield

Question 14

Total Quality-approved Products calculation

Answer 14

= Total units Produced - (Total Units Produced * %Scrap)

Question 15

Cost per Quality-approved Product

Answer 15

= Total material costs / Total Quality-approved Products

Question 16

Basic Salary Calculation

Answer 16

= #of Employees x Contract Hours x Timeframe x Wage/h

Question 17

Allowance Calculation

Answer 17

= Basic Salary * %Allowance

Question 18

Holiday Allowance Calculation

Answer 18

= (Basic Salary + Allowance) * %HollidayAllowance

Question 19

Thirteenth Month Calculation

Answer 19

= (Basic Salary + Allowance) * 1/12

Question 20

Pension Contribution Calculation

Answer 20

= (Basic Salary + Allowance + Holliday Allowance + Thirteenth month) * %PensionContributon

Question 21

Social Security Contribution Calculation

Answer 21

= (Basic Salary + Allowance + Holliday Allowance + Thirteenth month) * %SocialSecurity

Question 22

Total Labour Costs

Answer 22

= Basic Salary + Allowance + Holliday Allowance + Thirteenth month + Pension Contribution + Social Security Contribution

Question 23

Contract Hours

Answer 23

= #of Employees * Contract Hours * Timeframe

Question 24

Leave Hours

Answer 24

= #of Employees * Average Leave

Question 25

Absence

Answer 25

= Contract Hours * %Absence

Question 26

#of Productive Hours per Year

Answer 26

= Contract Hours - Leave Hours - Absence

Question 27

Productive Hours Calculation

Answer 27

= #of Productive Hours per Year * %Productivity

Question 28

Rate based on Total Labour Costs & Productive Hours

Answer 28

= Total Labour Costs / Productive Hours

Question 29

Sustainable Production Resources (SPR)

Answer 29

Resources that will be used for a longer time, such as buildings and machines

Question 30

Technical Lifespan Expiration

Answer 30

When an SPR is not able to produce what it was purchased for

Question 31

Economic Lifespan Expiration

Answer 31

When Complimentary Costs surpass Resale Value

Question 32

Complimentary Costs

Answer 32

Includes Maintenance, Energy, and Labour Costs (Increases over time [Wear & Tear])

Question 33

Resale value

Answer 33

The Value it can be sold at (Decreases over time [Wear & Tear])

Question 34

Acquisition Value (A)

Answer 34

The value of the machinery when it is purchased

Question 35

Residual Value (R)

Answer 35

The estimated value of the machinery after a certain amount of time

Question 36

Lifespan (n)

Answer 36

Economic Lifespan

Question 37

Total Value of Depreciation (D)

Answer 37

Total Value that needs to be Depreciated

Question 38

Method of Fixed Percentage of Acquisition Value Depreciation (Linear Depreciation)

Answer 38

1) Calculate the Depreciation Value (v) v = (A - R) / n 2) Calculate the Book Value Book Value Year x = A - x * v

Question 39

Method of Fixed Percentage of Book Value Depreciation (Regressive Depreciation)

Answer 39

1) Calculate the Fixed Depreciation Percentage (p) p = [ 1- n√ (R / A) ] x 100% 2) Book Value Y1 = A - A * p Book Value Y2 = Book Value Y1 - Book Value Y1 * p etc

Question 40

Method of Sum of The Years'-digits Depreciation

Answer 40

1) Calculate total Weighting Factor = (n + 1) / 2 * n 2) Calculate depreciation based on weighting factor per year Book Value Y1 = A - 10/Weighting Factor * D Book Value Y2 - Book Value Y1 - 9/Weighting Factor * D etc

Question 41

Method of Depreciation whereby the depreciation amounts decrease annually

Answer 41

1) Write down Depreciation table: Depreciation in year 1: X Depreciation in year 2: (X -2,000) Depreciation in year 3: (X - 4,000) Depreciation in year 4: (X - 6,000) 2) Add the whole equation to equal Total Depreciation Value 4x - 12000 = D 3) Algebra for x 4) Calculate Depreciation per year 5) Book value y3 = A - (Depreciation1 +Depreciation2 + Depreciation3)

Question 42

Sunk Costs

Answer 42

Certain costs that are not relevant to the decisions that must be made. They are costs resulting from past decision.

Question 43

Opportunity Costs

Answer 43

Are fees that are missed because a certain choice is made given limited capacity. Not directly linked to expenditures but necessary to give insight to the consequences of certain choices.