Cost Analysis

Abstract

The previous chapter has introduced some basic concepts such as marginal and incremental costs, and fixed and variable costs, which will now be discussed in more detail. First, a word of warning is necessary; comparisons are drawn between the economist’s and accountant’s methods of looking at costs. These comparisons are not intended to attach any praise to the former or blame the latter. Both economists and accountants have different, and, at times, overlapping roles; like Britain and America, however, they share a common language which is often a cause of mutual confusion and incomprehension.