COST ACCOUNTING PROFESSIONAL ENGLISH IN USE FOR FINANCE

 

PROFESSIONAL ENGLISH IN USE FOR FINANCE 17. COST ACCOUNTING

 

A Direct and indirect costs Cost accounting involves calculating the costs of different products or services, so that company managers can know what price to charge for particular products and services and which are the most profitable. Direct costs – those that can be directly related to the B Fixed and variable costs Companies also differentiate between fixed costs and variable costs. Fixed costs are those that do not change in the short term, even if the production level changes, such as rent and interest payments. Variable costs are those that change in proportion to the volume of production, such as components and was materials, and overtime payments. C Breakeven analysis When deciding whether it would be profitable to produce a product, or offer a service, companies do a breakeven analysis. This compares expected sales of the new product with   EXERCISES 17.1 Match the words in the box with the definitions below. Look at A, B and C opposite to help you. 1 expense that are not clearly related to production or manufacturing 2 a unit of activity in an organization for which costs are calculated separately. 17.2 Sort of the following into direct, indirect, fixed and variable costs. Look at A and B opposite to help you. 17.3 Which of the following statements describes: 1 absorption costing? 2 activity-based costing?

 

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