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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
Transportation model In the obvious sense, the model deals with the determination of a minimum cost plan for transporting a single commodity from a number of sources (e.g. factor
Intra company transfer pricing A company engaged in production may have several segments division or departments doing production jobs or manufacturing party or fully finished
Recommend whether marginal or absorption costing should be use for internal monthly reporting
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
5
Stages in activity based costing The different stages in activity based costing are listed below and are shown in figure below. 1) Identification of the activities that may
C-V-P ANALYSIS – MULTIPLE PRODUCTS The simple product CVP analysis can be extended to handle the more realistic situations where the firm produces more than one product. The o
analyse the methods of capital investment appraisal
1. In order to boost the housing market throughout 2009 and into 2010, the federal government offered a tax credit to first-time home buyers and some repeat buyers.
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