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Chapter 3.2 (Uses of Cost Data (Key factor in profit equation to make…

- - - - Production
        
        Including factory rent and rates, depreciation of equipment and power
      - Selling and distribution
        
        Including warehouse, packing and distribution and salaries of sales staff
      - Administration
        
        Including office rent and rates, clerical and executive salaries
      - Finance
        
        Including interest on loans
  - - - Costs that do not vary with output in the short run
      - eg. the rent of a factory cost remained the same even if the output level change
    - - Costs that vary with output in the short run
      - eg. the cost of materials used in making a washing machine would be vary depending on the output
    - - Costs that have both fixed and a variable cost element
      - eg. a sales person's fixed basic wage plus a commision that varies with sales