1. Fixed cost: such as rent, utility cost, administration costs
Chap 2:
Fixed cost: such as rent, utility cost, administration costs
Variable cost: such as labor, material costs
Total cost = fixed cost + variable cost
Average cost = total cost / number of units
Marginal cost: cost of additional unit of production
Breakeven point: level of production at which total cost
is equal to total revenue (profit region, loss region)
Incremental cost: difference between cash flow of two
alternatives
Book cost: cost effects from past decisions that are recorded
“in the accounting books”.
Cash cost: cash transactions
Learning curve: indicates relationship between efficiency of
Performance and task repetition.
EGR 403, Feb 04

2. EGR 403, Feb 04