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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
Explain the concepts of costs. A cost accountant is mainly concerned with the following cost concepts. 1. Concept of objectives: it is this concept that gives direction to
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tell me how go about charging for your services
Moore Company uses process costing. The following information was available for October: During October, 1,000 units were started, and costs incurred during the month were
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