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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
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Characteristics of irrelevant costs
discuss which of the cost classification is suitable for LunchBreak LTD and why?
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what areas can linear programming be applied in managerial accounting?
Funded debt to total capitalization ratio The ratio establishes a link among the long term funds raised from outsider and total long term funds available in the business. The
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