{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Fraud Chapter 11 Powerpoint

Cvp for use in flexible dynamic budgeting activities

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: n flexible (dynamic) budgeting activities. For For use in standard costing, in particular, MOH variance For analysis. analysis. For use in determining Manufacturing Overhead (MOH) For application rates. application For use in litigating or defending a wide variety of costrelated legal issues: – Federal antitrust cases - predatory pricing. – Alleged contractual violations. – Measurements of damages for lost sales/profits/etc. IES-Tomkins College 8 Common Types Of Cost Behavior FIXED COSTS: Costs that fundamentally are not driven by changes in volume. not Y = Total Cost Y = a, where a is the amount of fixed cost where Common examples of fixed costs - Depreciation, Common Property taxes, Supervisor salaries Property IES-Tomkins College 9 Common Types Of Cost Behavior Common VARIABLE COSTS: Costs that change directly and proportionately with the volume of activity. and Y = bX, where b is the slope of the line (the bX, increase in cost relating to the increase in volume) and X is the measure of the volume of activity. Common examples of variable costs - Direct Common materials, Direct Labor, Sales Commissions materials, IES-Tomkins College 10 Common Types Of Cost Behavior Common MIXED COSTS: Costs that contain both a MIXED both fixed and a variable component. fixed Y = a + bX, Where a equals the fixed bX, component and bX is the variable component. component. Common examples of mixed costs - Some Common lease agreements, some utility costs, many overhead costs. overhead IES-Tomkins College 11 Common Types Of Cost Behavior Common SEMI-VARIABLE COSTS: Costs that change SEMI-VARIABLE but not proportionately with the volume of activity. activity. Learning curve costs - are costs that increase at a decreasing rate with the volume of activity. decreasing When graphed, learning curve costs slope upward When and to the right but not in a straight line; Instead they curve downward. they IES-Tomkins College 12 Common Types Of Cost Behavior Common SEMI-FIXED COSTS: Costs that SEMI-FIXED increase in steps or jumps. Also called set function costs Some argue that all fixed costs are step Some function costs over the long run function IES-Tomkins College 13 Cost Behavior Assumptions Cost Relevant Range: Cost behavior estimates are usually based on historical cost observations and analyses. If cost behavior characteristics are projected outs...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online