What are the three cost categories?
Nature (direct and indirect)
Function (productions and non-production)
Behaviour (variable and fixed)
What are stepped fixed costs?
Costs that are fixed upto a certain level of activity but then increase once a point is reached
What are semi-variable costs?
Costs that have both fixed and and variable elements
How do you calculate total semi-variable costs?
Total cost=fixed cost + (variable cost per unit x production volume)
High low method
Find the highest and lowest units
Take them away
Divide the total cost by the units to get variable cost per unit
Calculate the fixed cost using the formula
What is capital expenditure?
Where the purchased item will last more than one year
What is revenue expenditure?
Where the purchased item will last less than one year
What is a cost card?
The summary of the costs involved in producing a unit of a product
What is a cost unit?
A product or service which costs are allocated and gathered together in a cost card
What are cost centres?
Collecting points for costs
Types of responsibility centres?
Cost centres (costs)
Revenue centres (sales)
Profit centres (costs and sales)
Investment centres (all of the above)
