Algebraic analysis, Managerial Accounting

Assignment Help:

ALGEBRAIC ANALYSIS

The supposition of linear cost behavior allows use of straight-line graphs and simple linear algebra in cost-volume study.

The net cost is a semi-variable cost—few of the costs are fixed, a number of costs are variable, and others are semi-variable. In study, the fixed component of a semi-variable cost can be treated similar to any other fixed cost. The variable component can be treated similar to any other variable cost. As an outcome, we can state that:

Total Cost = Fixed Cost + Variable Cost
          
By using symbols:
               
C = F + V


Here:

C = Total cost
F = Fixed cost
V = Variable cost

Net variable cost based on two elements:

Variable Cost = Variable Cost per Unit x Volume Produced
           
By using symbols:

V = Vu (Q)

Here:

VU = Variable cost per unit
Q   = Quantity (volume) produced

Replacing this variable cost information into the fundamental total cost equation, we have the equation employed in cost-volume study:

C = F + VU (Q)


Related Discussions:- Algebraic analysis

Introduction to performance evaluation, Introduction to Performance Evaluat...

Introduction to Performance Evaluation Performance evaluation deals with the area of MA that is concerned with: 1) Holding individual managers responsible for certain aspect

CPM @ pert, 2. Draw the network diagram for the following problem and indi...

2. Draw the network diagram for the following problem and indicate a sequence of plans that the company should want to consider in making a time-cost tradeoff. The company is not

Financial perspective, Financial Perspective How do we produce value fo...

Financial Perspective How do we produce value for our shareholders? This perspective covers traditional measures e.g. growth, liability, shareholder value. But these are set on

Explain phases of life cycle of a product, Q. Explain Phases of life cycle ...

Q. Explain Phases of life cycle of a product? Every product move through a life cycle having five phases as shown in figure and they are 1) Pricing during introduction 2)

Standard costing and budgetary control , STANDARD COSTING AND BUDGETARY CON...

STANDARD COSTING AND BUDGETARY CONTROL In practice, the terms standard cost and budgeted cost might be used interchangeably. Whereas it is possible to have budgeting without s

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

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

Importance of a budget, Importance of a budget A Budget is a plan expre...

Importance of a budget A Budget is a plan expressed in monetary terms. It is prepared prior to the budget period and may show income, expenses and the capital to be used i.e. a

The case of a fixed discount-discount structures, The case of a fixed disco...

The case of a fixed discount When evaluating inventory decisions when a fixed discount rate exists, the appropriate procedure is to compare the total costs of the EOQ with the

Define performance budgeting according u.s. bureau of budget, Define perfor...

Define performance budgeting according U.S. bureau of budget U.S. bureau of budget defines performance budget as one which presents purposes and objectives for which funds are

Capital budgeting – planning investments, Project C would involve a current...

Project C would involve a current outlay of $50,000 on equipment and $15,000 on working capital. The investment in working capital would be increased to $21,000 at the end of the f

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