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Account analysis (Inspection of accounts) method:
This method requires that departmental managers and the accountant inspect each item of expenditure within the accounts for some output level and then classify each of these items as wholly fixed, wholly variable or mixed.
A single average unit cost figure is selected for the items categorized as variable whereas a single total cost for the period is used for the items categorized as fixed.
Mixed costs are decomposed into their variable and fixed components.High low method (Two point method):
Under this method, records of costs in the previous period are reviewed and the costs of 2 periods are selected. These are the period with the highest level of outputs and the period with the lowest output. A line passing through these two points is then established and used in estimating costs.
Input or exogenous variables These are variables of two types: 1) Controlled variables: These are variables that can be controlled by management. By changing the input
Firms need cash to invest in inventory, receivables and fixed assets and to create payments for operating expenses, so as to increase earnings and sales and make sure the smooth ru
do you make assignments on Advance Accounting subjects
The std cost of chemical mixture~PQ is as follows: 40% of material P @rs.400/kg 60% of material Q @rs.600/kg A std loss of 10% is normally anticipated in pdn. The followinng parti
COST-VOLUME PROFIT (C-V-P) ANALYSIS INTRODUCTION You can employ cost-volume-profit analysis to examine the natural relationship among cost, volume, and profit in pricing decision
Working Capital management is affected through two characteristics of current assets that are as follows (i) short life span (ii) swift transformation in the other asset forms.
INCOME STATEMENTS
How costs behave as the level of activity/volume changes. Why an understanding of cost behaviour is important ? Types Variable e.g. petrol, direct materials Fixed e.g.
The assignment model Consider the situation of assigning m jobs (or workers) to n machines. A job i(= 1,2,3 ...m) when assigned to machine j(= 1,2,3 ...n) acquires a cost Cij.
Receivable management is a specialized activity and needs various time and effort on the part of the firm. Collection of receivables frequently poses problems, mainly for small and
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