HTM 2030 Lecture Notes - Lecture 1: Fixed Cost, Decimal Mark, Standard Cost Accounting

• School: University of Guelph
• Department: Hospitality and Tourism Management
• Course: HTM 2030
• Professor: Alison Crerar

Document Summary

Chapter 1: intro to cost control and sales concepts. Cost is an expense incurred by an operation when goods are consumed to provide goods or services to customers. Recognize costs when they are incurred rather than when we paid for them. Accrual accounting: match the cost of the goods or services with the sales revenue at the time the transaction takes place rather than when we pay for them or receive payment. A fixed cost is one that does not change as the volume of sales changes, cost will be the same no matter how much u sell. Examples: rent is always the same regardless of sales. A variable cost is one that increases as the volume of sales increases. An increase in sales revenue causes an increase in the cost. A step variable cost is one that increases in discrete intervals or stages.