Week 8 Flashcards
(13 cards)
1
Q
historic cost
A
a cost already incurred
2
Q
opportunity cost
A
the value of an opportunity forgone
3
Q
relevant cost
A
relates to the future
4
Q
irrelevant cost
A
relates to the past
5
Q
fixed cost
A
remain constant
6
Q
variable cost
A
vary according to volume of activity
7
Q
break even
A
level of output where the total cost us equal to total revenue
8
Q
break even equation
A
fixed costs/contribution per unit
9
Q
contribution per unit
A
sales rev per unit - variable costs per unit
10
Q
units to produce and sell to achieve a target profit
A
(fixed costs + target profit)/contribution per unit
11
Q
margin of safety in units of out put eqution
A
planned sales - break-even point
12
Q
margin of safety in percentage
A
((planned sales - break-even point)) x100/ planned sales
13
Q
-ves of cost behaviour and breakeven analysis
A
- non-linear relationships
- stepped fixed costs
- multi-product businesses
