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

Evaluate average duration of the production run, A manufacturing  company ...

A manufacturing  company  needs  2500 units  of a particular component every  year. The  company buys  it at the rate of Rs. 30 per  unit.  The order processing cost for this part

Describe the benefits of operating decisions - relevant cost, Relevant cost...

Relevant costs and benefits for operating decisions: In operating decisions, concentration is on best use of existing capacity. Incremental analysis based on differential cost

Costing, Costing Cost accounting can be described as the collectio...

Costing Cost accounting can be described as the collection, interpretation of cost and assignment. In succeeding chapters, you will learn about alternative costing techniq

State performance budgeting according to carter performance, State performa...

State performance budgeting according to carter performance According to carter performance budgets use statement of mission goals and objectives to explain why the money is be

Nominal Payback Periods, What would be the Nominal Payback Period for an ac...

What would be the Nominal Payback Period for an account with 4% compounded annually for 5 years.

Preparation of comparative balance sheet, Problem From the following ba...

Problem From the following balance sheets of Dramas Ltd., compute the trend percentages using 31st December 2005 as the base year. Assets & Liabilities

Marginal costing variances, reasons for favourable or adverse variances i....

reasons for favourable or adverse variances i.e. prise usage, mix, yeild

Explain profitability ratios in relation to sales, Explain Profitability ra...

Explain Profitability ratios in relation to sales a) Gross profit ratio b) Net profit ratio c) Operating ratio d) Operating profit ratio e) Expenses ratio

State the working capital turnover ratio, State the Working capital turnove...

State the Working capital turnover ratio  Meaning: this ratio establishes a relation ship among net sales and working capital. Working capital turnover ratio shows the vel

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