Cost variance measures the difference between actual costs incurred and budgeted costs.

Total contribution = Contribution margin per unit * Number of units = $40 * 300 = $12,000.

Total contribution margin = Contribution margin per unit * Number of units = $25 * 150 = $3,750.

Contribution margin per unit = Selling price - Variable cost = $80 - $50 = $30. Total contribution margin = Contribution margin per unit * Number of units sold = $30 * 500 = $15,000.

Total Cost = Fixed Costs + (Variable Cost per Unit * Number of Units) = $10,000 + ($5 * 1,000) = $10,000 + $5,000 = $15,000.

Total Variable Cost = Variable Cost per unit * Number of units = $40 * 1,000 = $40,000.

Opportunity cost represents the potential benefits lost when one alternative is chosen over another.

Manufacturing overhead includes indirect costs that cannot be traced directly to specific units.

Variable costs change with the level of production and are directly tied to the manufacturing of a product.

Variable costs change with the level of production and are directly associated with the production of goods.

Fixed costs do not change with the level of production or sales within a relevant range.

Incremental budgeting takes the previous year's budget as a base and makes adjustments for the new period.

Incremental budgeting uses previous periods' budgets as a base and adjusts for expected changes.

Incremental budgeting uses the previous year's budget as a base and adjusts for changes.

Direct costs are those that can be traced directly to a specific product.

Absorption costing assigns all manufacturing costs, both fixed and variable, to the product, making it a comprehensive costing method.

Absorption costing includes both fixed and variable costs in the cost of a product.

Absorption costing includes both fixed and variable costs in product costs.

Marginal costing is best for short-term decision-making as it focuses on variable costs and contribution margin.

Job order costing is suitable for custom-made products as it tracks costs for each individual job.

Job order costing is suitable for companies that produce custom-made products, as it tracks costs for each individual job.

Marginal costing is primarily used for internal decision-making as it focuses on variable costs.

Opportunity cost refers to the cost of the next best alternative that is foregone when a decision is made.

Sunk costs are past costs that have already been incurred and cannot be recovered, such as past research and development costs.

Direct labor costs can be directly traced to the production of specific goods.

Direct materials used in production are directly traceable to the product and classified as direct costs.

A mixed cost has both fixed and variable components, such as an electricity bill.

Fixed costs remain constant regardless of production levels within a relevant range.

Factory rent is a fixed cost as it does not change with the level of production.

Marginal costing simplifies the decision-making process by focusing on variable costs and contribution.