Cost Structure

Average Fixed Cost (AFC)
Average Fixed Cost (AFC) is a financial metric in economics which is calculated by taking the total fixed costs (TFC) of production and dividing them by the total output (Q) produced. AFC helps in understanding how fixed costs are spread across units produced, giving insights into the cost structure of production.
Operating Leverage
Operating Leverage is a financial concept that measures the proportion of fixed costs in a company's cost structure and how these fixed costs amplify the effect of changes in sales on operating income.
Postal Account
A specialized savings account operated via postal mail or automated teller machines (ATMs), offering higher interest rates due to its reduced operational costs.
Variable Cost
Variable cost refers to expenses that change in proportion to the production output or sales volume. They fluctuate based on the operational activity, such as material costs, labor costs, and utility expenses.

Accounting Terms Lexicon

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