List of top eight examples to illustrate the theory of cost. Example 1. The short-run cost function of a company is given by C = 190 + 53 Q, where C is the total cost and Q is the quantity of output. (i) What is the company's fixed cost? (ii) If the company produces 100 units, what is the average [...]
In this article we will discuss about theory of Cost:- 1. Subject-Matter on Theory of Cost 2. Information on Cost 3. Purpose of Cost Data 4. Decisions Requiring Cost Information 5. Costs and Expenses 6. Factors Affecting Cost Behaviour. Subject-Matter on Theory of Cost: We may now set forth the fundamentals of the theory of cost. Since cost and productivity [...]
The following points highlight the twelve main concepts for managerial decision making. Some of the concepts are: 1. Direct and Indirect Cost 2. Opportunity Vs. Outlay Cost 3. Relevant Costs and Irrelevant Costs 4. Past vs. Future Cost 5. Traceable (Separable) and Common Costs 6. Out of Pocket and Book Costs 7. Committed and Discretionary Costs 8. Marginal and Incremental [...]