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AAT Budgeting L4 AQ2016 > Types Of Costs > Flashcards

Flashcards in Types Of Costs Deck (6)
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1

What is a stepped cost

A cost that remains constant in total for a limited range of output volume, and then moves to various higher amounts for higher volume levels

2

What is a variable cost

When the total cost varies in direct proportion to the level of activity.

3

What is a fixed cost

When the total cost does not change when the level of activity changes

4

What is a semi variable cost

When the total cost is made up of a variable part and fixed part

5

What is interpolation

When you use a pattern of cost behaviour to calculate costs for a level of activity within a given range

6

High - low method

Cost / no of units = variable cost