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17 Cards in this Set
- Front
- Back
Relevant Costs |
Differ between alternatives |
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Controllable |
If it can be avoided by NOT picking the option |
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As the time horizon gets longer, costs... |
become more controllable |
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Sunk Cost |
Cost incurred in the past; cannot be changed |
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Sunk costs are... |
NOT relevant NOT controllable |
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Traceability |
degree a cost or benefit can be related to the decision option |
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Direct Cost/Benefit |
uniquely relatable (traceable) to the decision option; measurable |
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Indirect Cost/Benefit |
Relates to the decision option, but not fully traceable; difficult to measure (common costs) |
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Variability |
how an activity influences a cost or benefit |
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Variable Costs |
change in total with each unit produced (more units, more cost) |
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Fixed Costs |
Do not change in total with each unit produced |
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Mixed Costs |
contains variable and fixed components |
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Fixed Costs |
Stay at the same level for an activity range, but jumps to a high amount if volume increases |
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Unit Level |
increase of decrease in direct proportion to the number of units products (variable costs) |
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Batch Level |
depends on the number of batches produced (step up costs) |
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Product level |
Relates to specific products |
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Facility Level |
Fixed costs to operate a factory/sustain the organization |