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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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One of the significant elements of credit management is the assessment of the credit risk of the customer. As assessing risk two kind of errors arise that are as follows. Type
Outline Five characteristics of relevant cost
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Value analysis Is a formalized technique involving a rigorous analysis of products at the design stage or at any time during the saleable lives, to determine their value charac
Types of Non-Controlled Variables a) Parameters: These are input variables that for a given simulation have a constant value. They are factors which help specify the relat
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question:lease accounting implicit rate unknown,20%incremental rate leaseterm 4 years,find implicit rate using trial and error method.i know nothing about trial and error method in
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