Price Elasticity of Demand

Cost

The monetary measure of the amount of resources given up or used for some purpose

Period Costs

The non-manufacturing costs that include selling, administrative, and research and development costs

Price elasticity of demand

What is the ratio of the percentage change in quantity demanded of a product to the percentage change in price

Elasticity

What is the term used to describe this sensitivity?

Manufacturing costs

All costs incurred in the factory to convert raw materials into finished goods

Non-Manufacturing Cost

All costs not incurred in transforming materials to finished goods

Product Costs

Cost incurred to manufacture the product (Direct Materials, Direct Labor, Factory Overhead)

Elasticity of demand

What is the effect of a change in price on the quantity demanded called?

Mixed Cost

This cost has both a variable and a fixed component

Marketing costs

What are Advertising and promotion expenses

General and Administrative Costs

What are all the non-manufacturing costs that yk

After-sales costs

What are costs incurred in dealing with customers after sales?

Research and Development, Marketing Costs, Distribution Costs, Selling costs, After-sale costs, General and Administrative Costs

What are examples of Non-Manufacturing Costs?

Selling Costs

What are salaries and commission of sales staff and other selling exxpenses

Distribution Costs

What are the costs incurred in delivering the product to the customers

Research and Development

What is incurred in designing and bringing new products to the market

Fixed Cost

Within the relevant range an time period under consideration, the total amount remains unchanged, and the per-unit amount varies inversely or indirectly with the change in the cost driver

Variable Cost

Within the relevant range and time period under consideration, the total amount varies directly to the change in activity. The amount per unit is constant