Account analysis-high low method-cost estimation method, Managerial Accounting

Assignment Help:

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.


Related Discussions:- Account analysis-high low method-cost estimation method

Balanced score card, Balanced Score Card This is a popular approach in ...

Balanced Score Card This is a popular approach in current management thinking which consists of a variety of indicators both financial and non-financial. The balanced scorecard

Linear programming, what areas can linear programming be applied in manager...

what areas can linear programming be applied in managerial accounting?

Industrial Grinders, accepted#Regarding the Overhead costs, these are alloc...

accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;

Classification of costs, identify and explain the many classification of co...

identify and explain the many classification of costs for planning, control,performance evaluation and decision making.

#titDescribe the "agency problem" and the Sarbanes-Oxleyle.., Discuss the d...

Discuss the dominant compensation philosophy, share value creation and the link between company size and executive pay. Solve Parmalat''s case, which may be found in reading No. 8.

Linear Programming, Explain with examples five areas where linear programmi...

Explain with examples five areas where linear programming can be applied in Managerial accounting

Asset securitisation, The emerging financial scenario has made a fierce com...

The emerging financial scenario has made a fierce competition among the companies to raise funds by innovative financial products by the capital and or money markets. Moreover sour

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd