APM PMQ Business Case and Investment Appraisal | Questions with 100% Correct Answers | Verified | Latest Update 2024

What is a fixed cost? - A cost that remains the same over a given period of time irrespective of output/production changes e.g. rent, rates, step fixed costs. What is a variable cost? - Refers to a constant amount per unit of output/production e.g. changes in proportion to the volume of output; materials used in production. (May change depending on departmental viewpoint) What is a semi-variable cost? - Costs comprising both fixed and variable components e.g. phone tariff, photocopier. What are Direct Costs? - Costs that can be specifically identified with a particular project or activity. e.g. cost of materials and labour in a manufacturing environment, software rented solely for one project. What are indirect costs? - A cost which cannot be attributed to a particular unit of output. They are incurred by the business as a whole e.g. head office costs, marketing costs Overheads. What are discretionary costs? - Costs that organizations have discretion in deciding whether to fund them e.g.