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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
I am part of a marketing group, and we are working on a project for a local cable company,they currently serve 3,200 customers and sell 50 wireless boxes a month,what I need to do
limitation
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Illustration: ABC analysis Combine items on the basis of their relative value to form three categories—A, B and C. The data in the table below illustrates the ABC analysis.
Std error of the slope (Sb) Correlation coefficient measures the degree of association between two variables such as the cost and the activity level. The standard error of ‘
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