CHAPTER 3 ACTIVITY COST BEHAVIOR LEARNING OBJECTIVES AFTER STUDYING THIS CHAPTER‚ YOU SHOULD BE ABLE TO: 1. Define and describe fixed‚ variable‚ and mixed costs. 2. Explain the use of the resources and activities and their relationship to cost behavior. 3. Separate mixed costs into their fixed and variable components using the high-low method‚ the scatterplot method‚ and the method of least squares. 4. Evaluate the reliability of the cost formula. 5. Explain how multiple regression
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Lesson-13 Elements of Cost and Cost Sheet Learning Objectives • • • To understand the elements of cost To classify overheads on different bases To prepare a cost sheet Elements of Cost Raw materials are converted into finished products by a manufacturing concern with the help of labor‚ plants etc. The elements that constitute the cost of manufacturing are known as elements of cost. The elements of cost include the following: • • • Material Labor Expenses Each of these elements is again subdivided
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Sunk Cost-cost that has already been incurred and cannot be avoided no matter what a manager decides to do. A business segment should only be dropped if a company can avoid more in fixed costs than it loses in: contribution margin Which of the following techniques describe how a bottleneck should be managed: Find ways to increase the capacity of the bottleneck‚ ensure there is minimal lost time at the bottleneck due to breakdowns and set-ups‚ focus business process improvement efforts on the bottleneck
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Cost Allocation University of Phoenix Accounting in Healthcare ACC561 December 12‚ 2010 Cost Allocation Transfer Pricing [pic] [pic] Transfer pricing is a value attached to the output of a department to measure the value of the trade with other departments within the organization. Transfer prices will not affect the organization’s profit results. This contributes directly to the process of departmental performance measurement and indirectly to the measurement of a product
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entirety before answering. 9. Clearly show and label all calculations to facilitate the awarding of marks. Explicitly state any special assumptions that you make in answering a question. Question 1 (total: 16 marks) Multiple-choice Questions (2 marks each‚ unless otherwise noted) Choose the best answer for the question from among the choices provided. 1. Cost accounting differs from financial accounting in that cost accounting is: a) Primarily concerned with income
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Education. All rights reserved. Contents Preface iii Chapter 1 The Changing Role of Managerial Accounting in a Dynamic Business Environment 1-1 Chapter 2 Basic Cost Management Concepts 2-1 Chapter 3 Product Costing and Cost Accumulation in a Batch Production Environment 3-1 Chapter 4 Process Costing and Hybrid Product-Costing Systems 4-1 Chapter 5 Activity-Based Costing and Management 5-1 Chapter 6 Activity Analysis‚ Cost Behavior‚ and Cost Estimation 6-1 Chapter 7 Cost-Volume-Profit
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| | | |Assignment : Managing Cost and making financial interpretations for decision | |
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Name of student:_________________ 9 Activity-Based Costing Review Question Answers 9-4 It will require more work. Significant amounts of indirect costs are allocated using only one or two cost pools. All or most costs are identified as output unit-level costs. Products make diverse demands on resources because of differences in volume‚ process steps‚ batch size‚ or complexity. Products that a company is well suited to make and sell show small profits while products for which a company is
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rising cost of health care are aimed at reducing medical resource consumption rates. These approaches may be limited in effectiveness because of the relatively low variable cost of medical care. Variable costs (for medication and supplies) are saved if a facility does not provide a service while fixed costs (for salaried labor‚ buildings‚ and equipment) are not saved over the short term when a health care facility reduces service. OBJECTIVE: To determine the relative variable and fixed costs of inpatient
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Cost Theory in Economics A central economic concept is that getting something requires giving up something else. For example‚ earning more money may require working more hours‚ which costs more leisure time. Economists use cost theory to provide a framework for understanding how individuals and firms allocate resources in such a way that keeps costs low and benefits high. 1. Function * Economists view costs as what an individual or firm must give up to get something else. Opening a
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