ENGL 112 Lecture Notes - Lecture 9: The Intercept, Sunk Costs, Management Accounting
Document Summary
Variable costs: costs that change with change in volume. E. g. wages (hourly), utilities, materials used in production, commissions, rate relative to labor and capital. credit card fees, freight out. Fixed costs: costs that do not change with change in volume. These remain constant throughout the relevant range and are usually considered sunk for the relevant range. E. g. rent, building, machinery, property taxes, salaries, depreciation, etc. Product costs: costs that are directly traceable to making the product the direct materials, direct labor, and manufacturing overhead used in making its products. Period costs: costs that are not directly traceable to making the product. Not a necessary part of the manufacturing process. Period costs cannot be assigned to the products or to the cost of inventory. Are usually associated with the selling function of the business or its general administration. Bigger planes are heavier going to use more fuels (also not eco-friendly) increases the cost for the airline.
