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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. car tax, factory rental
Semi-variable (Hybrid) e.g. phone bill. Cost separation is the process of separating the fixed and variable elements of a semi variable cost.
Methods
High – Low Method
Regression Analysis
Cost Separation
Why an understanding of cost behaviour is important ?
Unit Costing
Pricing
Decision Making
Budgeting
Break-even analysis
Given budgeted figures and actual, then analyses each fixed cost into its components
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implications of applying accounting concepts wrongly
Compute the ‘fair' value of the two nearest to expiration futures contracts on the Hang - Seng Index (HSI) using HSI as the underlying asset Answer the following questions: a
What does it mean when we say consistency is the central feature of economic rationality?
company jobcosting system
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