Define the following terms: incremental cost, opportunity cost, and sunk cost.

Q: Define the term price-takers.

A: Price takers is the term used for individual or a company which cannot influence the price of a…

Q: Define the following concepts: a)Prime cost    b) Non production cost

A: All costs incurred are categorised into production and non production cost on the basis of the…

Q: Define and give examples of the following terms: cost pool, cost object, and cost allocation (or…

A: Responsibility accounting: Responsibility refers to the several concepts and tools used by managers…

Q: Define initial direct costs.

A: Initial direct cost: A cost that is incurred during the process of initiating the agreement of lease…

Q: Define the following terms: (a) cost behavior and (b) relevant range.

A: Cost behavior and relevant range are terms under cost accounting. Cost behavior studies the pattern…

Q: Distinguish between prime costs and conversion costs.

A: Definition of Prime Cost:Prime cost is refer as the cost incurred for manufacturing of goods. It is…

Q: Define the term contribution margin.

A: Contribution margin is defined as the term which determines the profitability of the individual…

Q: Describe the following terms: (a) residual value, (b) guaranteed residual value, and (c) initial…

A: (a) Residual value: It is the projected ending value of an asset after its useful life or lease…

Q: Distinguish betweenproduct costs and periodcosts and give examplesof each.

A: Product cost: The product cost relates to the manufacturing costs such as direct material, direct…

Q: Describe why base measurement on historical costs?

A: Definition: Historical cost: Historical cost explains that assets and liabilities appear in the…

Q: Explain the relationship between the costs of flexible and committed resources, usage of resources,…

A: Cost accounting system: Cost accounting system of an organization consists of procedures and…

Q: Define the following terms, and explain the relationship between them: (a) cost estimation, (b) cost…

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: Define cost-allocation base?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Describe the components of contribution margin.

A: Contribution Margin: Contribution Margin refers to the margin of profit expected by the company. The…

Q: Which costs make up “prime” costs？

A: Prime cost is that cost, which is directly concerned with the product such as direct material,…

Q: Define and distinguish between contribution margin per unit and contribution margin percentage?

A: Contribution margin is the difference between the total revenue and total variable costs of a…

Q: Define conversion costs?

A: Cost: Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Q: Define the term total costs.

A: Costs: Costs refer to the expenses incurred by the business in the procurement of the materials,…

Q: What is a standard cost? Explain? Give an example?

A: Standard Cost: Standard cost is the benchmark amount of per unit product, per unit input or per unit…

Q: Describe the concept of the INITIAL DIRECT COSTS?

A: Definition:   Initial direct costs: Initial direct costs refer to the costs that a lessor incurs…

Q: Define prime costs with an example?

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: Define prime costs?

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: Define the terms sunk cost and differential cost.

A: Differential cost:  Differential cost is the change in total cost due to increase or decrease in…

Q: cost benefit model

A: The benefit under the cost-benefit model is calculated by deducting the associated cost from the…

Q: Understand how fixedand variable costs behave andhow to use them to predictcosts.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What is the equation to find Contribution Margin?

A: Contribution margin:   Contribution margin refers to the process or theory that is used to judge the…

Q: What is total cost?

A: The answer is explained as follows:

Q: Define opportunity cost

A: Opportunity costs represent the benefits an individual, investor or business misses out onwhen…

Q: Define sunk cost

A: Companies when making crucial decisions about their operations consider relevant costs i.e. costs…

Q: Define cost tracing?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Discuss the Cost- Volume- Profit assumptions

A: Cost-volume-profit analysis: It is also called break-even analysis which measures the impact on…

Q: Define cost pool?

A: Step 1 The amount of money expended on producing a particular product is referred to as cost. Direct…

Q: Describe the concepts of contribution margin, relevant range, and relevant costs

A: Solution:- Analysis the concepts of contribution margin, relevant range, and relevant costs as…

Q: What are sunk costs? Give an example.

A:

Q: Define research and development and what are its representative cost driver?

A: Cost drivers: It refers to the object or things which affect the costs of a business. For example,…

Q: Explain one example of the cost driver.

A: Cost drivers are used in Activity Based Costing. Cost drivers are used to allocate overhead costs to…

Q: Define the term net realizable value, and explain how this concept can be used to allocate joint…

A:

Q: Define the term opportunity cost, and give an example of one.

A: Opportunity cost: It is the benefit which is foregone by choosing next best alternative. In mutually…

Q: Which of the following is the best definition of a variable cost?

A: Types of Costs 1. Variable Cost: The cost which changes with the change in the level of activity is…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.