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Assumptions for relevant costs The key assumptions made in relevant costing are: The cost behavior is recognized. The amount of fixed costs, unit variable costs, selli
Variables Unrestricted variable Yi can be expressed in terms of two non-negative variables by using the substitution: Yi = Yi' - Yi'', Yi', Yi'' ≥ 0 The substitution
Alternative performance measures There are various measures that can be used to measure performance of a decentralized company. The major ones are: • Return on Investmen
State the Penetration pricing As opposed to the skimming pricing the objective of penetration pricing is to gain a foothold in a highly competitive market. The objective of thi
distinguish between cost unit and cost centre
1. If the marginal cost of producing a good is increasing as a firm produces more of the good, then which of the following must be true? a. AFC is rising b. AVC i
Z or t Statistics If n ≥30 we use Z, if, n Ho: B = O that is, there is no relationship between X and Y HA: B≠ O There is a significant relationship between X and Y The l
Managerial Accounting Before going to Managerial Accounting let us discuss a bit about Financial Accounting. Financial accounting is concerned with reporting to the external pa
Suppose the spot price for Euro is $1.30, the futures price for delivery in 6 months is $ 1.29675. Assume that the 6 month borrowing/lending rate in Euro is 1.5 percent (annually,
Standard costing in modern environment Standard costing has traditionally been associated with labor-intensive operations, but it can be applied to capital-intensive production
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