Question

Match the terms in the first column with the appropriate definition in the second column. ...


Match the terms in the first column with the appropriate definition in the second column. 

Transcribed: Definitions (1) Any cost occurring after "time now" Terms (a) First cost Terms Definitions (b) Average cost (2) The total initial investment required to get an asset ready for service (c) Fixed cost (3) The ratio of total cost to total quantity of output (d) Overhead cost (4) The market value of an asset at the end of its life less its disposal costs (e) Marginal cost (5) The cost of obtaining funds through debt obligations () Opportunity (6) The incremental cost of producing one more unit of cost |output (g) Salvage value (7) Any past cost or portion of past cost that is not recovered (h) Sunk cost (8) The recurring costs that are necessary to operate and maintain an asset (1) Variable cost (9) Any cost that varies with the quantity of output G) Past cost |(10) Any cost occurring prior to "time now" (k) Maintenance (11) Any cost that does not vary with the quantity of costs output (12) The cost of forgoing an opportunity to eam interest on funds (1) Future cost (m) Cost of debt |capital (13) All costs in manufacturing other than direct material and direct labor

Answer

Part (a) First cost : The total initial investment required to get an asset ready for service.

 

Part (b) Average cost : The ratio of total cost to total quantity.

Part (c) Fixed cost : Any cost that doesn't vary with the quantity of output.

Part (d) Overhead cost : The recurring cost that are necessary to operate and maintain a business.

Part (e) marginal cost : The incremental cost of producing one more unit of output.

Part (f) Opportunity cost : The cost of forgoing an opportunity to earn interest on funds.

Part (g) Salvage value : The market value of an asset at the end of its life less it's disposal.

 

Part (h) Sunk cost : Any past cost or portion of past cost that is not recovered.

Part (I) Variable cost : Any cost that varies with the quantity of output.

Part (j) past cost : Any cost that has occurred prior to now.

Part (k) Maintenance cost : The cost in manufacturing other than direct material and labour cost.

Part (l) Future cost : Any cost occuring after time now.

Part (m) Cost of debt capital : Cost of obtaining funds through debt obligations.

 

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