Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Cost Behavior
A firm's cost position results from the cost behavior of its value activities. The cost behavior is based on a number of structural factors which influence cost, which I term cost drivers. Numerous cost drivers can combine to determine the cost of a given activity. The significant cost driver or drivers can vary among firms in the similar industry if they employ different value chains. A firm's relative cost place in a value activity depends on its standing vis-à-vis important cost drivers.
Cost Drivers
Ten major cost drivers determine the cost behavior of value activities: economies of scale, learning, and the pattern of capacity utilization, interrelationships, linkages, integration, timing, optional policies, position, and institutional factors. Cost drivers are the structural causes of the cost of an activity and can be more or less under a firm's control. Drivers frequently interact to establish the cost behavior of a specific activity, and the associative impact of cost drivers will vary widely among value activities. Thus no one cost driver, such as scale or the learning curve is ever the sole determinant of a firm's cost position. Diagnosing the cost drivers of each value activity permits a firm to gain a complicated understanding of the sources of its relative cost position and how it may be changed.
Explain what is meant by traditional costing system. Support with example.
Differnetial cost analysis uses
What value can management derive from a Balance Scorecard? How does the management accountant contribute?
Select the cost driver(s): This might also be termed to as independent, explanatory or predictor variable. A cost driver can be stated as any factor whose change causes a chang
major ways that these complexities might impact a business
Profitability ratios The primary objective of a business under taking is to earn profits. Profit earning is considered necessary for the survival of the business. A business re
Implementation of ABC analysis The following steps are included in implementing the ABC analysis: 1. Categorize the items of inventories, establishing the expected use in un
Control Control includes a comparison of actual performance with the plan so that deviation from the plan can be identified and corrective action taken. It can be define
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.
Describe the impact of different types of standards on motivations and specifically,the likely effect on motivation of adopting the labor standard recommended?
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd