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    Describe the various terms dealing with costs(direct,indirect,sunk,fixed,variable.etc).

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    Opportunity, Fixed, Variable, and Sunk Costs are functions of accounting rules. Below are some cost classifications:

    FIXED: include all costs that do not vary with activity for an accounting period. Fixed costs are at any time the inevitable costs that must be paid regardless of the level of output and of the resources used. A Fixed Cost is there fore not an Opportunity Cost. Overhead is considered a fixed cost, even though it may vary somewhat according to the amount of activity.

    Total costs are usually expressed as Fixed + Variable

    VARIABLE: all other costs that are some function of activity. They are usually considered linear because ...

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