Week 6 Appendix D - Axia College Material Appendix D Costs...

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Axia College Material Appendix D Costs and Cost Cont rol Part I—Costs: Briefly define the following terms, and provide examples where appropriate. Term Definition and example Direct costs An expense that is in direct line with a certain department. F or example: The amount of labor needed to complete the job was predetermined. Indirect costs An expense that is not tied to a specific function. For example: We knew that the taxes were going to be due, we just didn’t know it was going to cost $1000.00. Fixed costs An expense that has nothing to do with the products that the company makes. For example: We need to figure out how to cut the cost of rent each month. No matter what our rent cost $4000.00 a month. There has to be a better way. Variable costs An expense that changes with the productivity of the company. For example: We need to pay some overtime to help meet out order goal. Step-fixed costs An expense that sits at a certain level but can increase or decrease depending on a significant change. For example:
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This note was uploaded on 07/30/2011 for the course HCA 270 taught by Professor Kulick during the Spring '10 term at University of Phoenix.

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Week 6 Appendix D - Axia College Material Appendix D Costs...

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