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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
The Nature of Accounting Accounting is process of recording, analyzing, summarizing, and interpreting financial (money-related) activities to allow individuals as well as org
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what are characteristics of relevant cost?
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x+2y+3z=6 2x+4y+z=7 3x+2y+9z=14
A bill is explained as an unconditional order in writing, addressed through one person to the other, signed through the person providing it, requiring the person to whom it is addr
critically examine the current cost accounting for price level changes
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