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Explain variable cost and fixed cost
Variable costs: costs that vary almost in the direct proportion to the volume of production are known as variable costs. The examples of such costs are direct material, direct labour and indirect chargeable expenses, such as electric power, fuel etc.
Fixed costs: costs which do not vary with the level of production are called as fixed costs. These costs are called fixed because these remain constant irrespective of the level of output. It must, though, be noted that fixed costs do not remain constant for all times. In fact, it in the long run all costs have a tendency to vary. Fixed costs remain fixed up to a certain level of production.
Use of Budgetary controls Budgetary controls are used for the following reasons: 1) To state the objectives of the organization as a whole. 2) To reveal the extent by whi
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Problem Marginal costing plays a major role in making certain decisions. It provides information to management regarding the behaviour of costs and the incidence of such costs
The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchas
UNCERTAINTY OF DEMAND Demand is the most troublesome variable to predict accurately. Actually, demand may fluctuate from day to day, from week to week or from month to month. T
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