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PLTW CIM Lesson 1.3

Toppenish High School - PLTW CIM Lesson 1.3The Cost of Manufacturing

Fixed Costs A periodic cost that remains (more or less) unchanged irrespective of the output level or sales revenue of a firm.
Non-Value Added (NVA) Typically generates a zero or negative return on the investment of resources and usually can be eliminated without impairing a process.
Overhead The general, fixed cost of running a business, such as rent, lighting, and heating expenses, which cannot be charged or attributed to a specific product or part of the work operation.
Profit The monetary surplus left to a producer or employer after deducting wages, rent, cost of raw materials, etc.
Raw Materials Basic substance in its natural, modified, or semi-processed state, used as an input to a production process for subsequent modification or transformation into a finished good.
Value-Added The difference between the price at which goods are sold and the cost of the materials used to make them.
Variable Cost Periodic cost that varies, more or less, in step with the output or the sales revenue of a firm. Such costs include raw material, energy usage, labor (wages), distribution costs, etc.
Created by: rliving01