Costs which are directly related to the product being made. (Main direct costs are direct materilas, direct labour and direct expenses.
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What are Indirect costs??
These are all the other costs which exist independent of the product being produced. (often called overheads)
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What are fixed costs??
These are costs which do not change in relation to output. (for example rent will remain the same whether you are producing 10 or 100 units)
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What are variable costs??
These are costs which change (vary) in relation to output. As output increases, the variable costs wil increase and as output decreases, the variable costs will decrease. ALL DIRECT COSTS ARE VARIABLE
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What are costs centres??
This is a department or service which a cost can be calculated. These can be split upinto Production Cost centres (department whcih produce a product) and service cost centres (departments which provide a service to the rest of the business)
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What are cost units??
This is a product which a cost can be calculated
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Other cards in this set
Card 2
Front
What are Indirect costs??
Back
These are all the other costs which exist independent of the product being produced. (often called overheads)
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