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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
Describe the impact of different types of standards on motivations and specifically,the likely effect on motivation of adopting the labor standard recommended?
5
Advantages of Transfer Pricing (a) Transfer pricing is similar to cost apportionment and allocation in that values of one department are passed to another. For cost apportionme
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Explain product cost Product costs are those costs which are associated with and directly identifiable with the product. In other words, which are assigned to the product are p
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