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When fixed cost treated as relevant cost?
Fixed cost become relevent cost when a particular decision affects the fixed cost of production. For Example: Before Decision fixed cost $100 After Decision Fixed Cost $120 so in this case fixed cost also becomes relevent for decision making.
When is fixed cost relevant in decision making?
When there will be change in fixed cost of business then at that time fixed cost will be relevant cost For Example if acquiring new machinery will reduce the amount of fixed expense in that case fixed cost is also relevant.
Is buiding depretiation a variable cost?
Depreciation is always part of fixed cost and that's why building deprecation is also part of fixed cost and not a variable cost.
Is variable overheads include in prime cost?
Direct labor and direct materials are the components of prime cost so no other cost is part of prime cost and hence variable overheads also not included in prime cost.
What is the Difference between prime cost and overhead cost?
Prime cost is the cost of materials and labor involved in production of a commodity, excluding fixed costs. Overhead cost is the cost of on-going expenses, such as rent, utilities, and insurance. Overhead costs are one of the major factors in determining how a company charges for its service or product.
What is definition of prime cost?
The prime cost of a product is the direct cost which includes the materials and labor needed. This does not include the fixed costs attached to the material.
When fixed cost treated as relevant cost?
Fixed cost become relevent cost when a particular decision affects the fixed cost of production. For Example: Before Decision fixed cost $100 After Decision Fixed Cost $120 so in this case fixed cost also becomes relevent for decision making.
When is fixed cost relevant in decision making?
When there will be change in fixed cost of business then at that time fixed cost will be relevant cost For Example if acquiring new machinery will reduce the amount of fixed expense in that case fixed cost is also relevant.
What are prime cost?
Prime Costs: Prime costs are those costs which are prime importance for making any product and include: Prime Cost = Direct Material + Direct Labor
Is buiding depretiation a variable cost?
Depreciation is always part of fixed cost and that's why building deprecation is also part of fixed cost and not a variable cost.
Is variable overheads include in prime cost?
Direct labor and direct materials are the components of prime cost so no other cost is part of prime cost and hence variable overheads also not included in prime cost.
What is the Difference between prime cost and overhead cost?
Prime cost is the cost of materials and labor involved in production of a commodity, excluding fixed costs. Overhead cost is the cost of on-going expenses, such as rent, utilities, and insurance. Overhead costs are one of the major factors in determining how a company charges for its service or product.
When fixed cost decreases what does this do for the break-even point?
When fixed assets reduces it also reduces the breakeven point because now less number of units required to fulfill the fixed cost.
Which lens would be called a prime lens?
A Prime lens is one that a fixed focal length. An example would be a 35mm lens. Prime lenses tend to have higher aperture capabilities at a lower cost. They also tend to focus faster because the focal length never changes.
Is capital a fixed cost?
capital is a fixed cost
Fixed cost variable cost equals?
Fixed cost and variable cost is equal to total cost as per following formula: Total Cost = Fixed Cost + Variable Cost
What are total costs in accounting?
Total cost/ full cost which include Prime Cost *Direct Labour cost *Direct Material Cost *Direct expenses Production Overhead *Variable Overhead *Fixed Overhead Selling and Distribution cost Administration Cost
