Evaluating Production Costs (Grade 11 NSC Matric Business Studies): Flashcards
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Production costs
Production costs
Total money spent to create products or deliver services
Primary costs
Primary costs
Direct expenses that go straight into making each product
Overhead costs
Overhead costs
Expenses to keep business running, not directly in products
Fixed vs variable overhead difference
Fixed vs variable overhead difference
Fixed stays same; variable changes with production level
Primary Cost formula
Primary Cost formula
Direct materials + Direct labour
Total Production Cost formula
Total Production Cost formula
Primary Cost + Overhead Expenses
Unit Cost formula
Unit Cost formula
Total production cost ÷ Number of units produced
Break-even point
Break-even point
Point where money in equals money out (no loss or profit)
Contribution margin formula
Contribution margin formula
Selling price per unit - Variable cost per unit
Break-even point calculation
Break-even point calculation
Fixed costs ÷ Contribution margin