A basic framework for analysing revenue costs This chapter is crucial for an understanding of costs and costing. It introduces the following concepts:

• Cost (Section 4.1); • Cost units, unit costs and cost centres (Section 4.1); • Total cost (Section 4.1); • Direct costs, indirect costs and overheads (Section 4.2); • Fixed costs, variable costs and semi-variable costs (Section 4.3); • Cost drivers (Section 4.4); • Variable costs, linearity and economies ofscale (Section 4.5); • Committed costs and managed costs (Section 4.6).