G rent for sales office managers salaries sales staff

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Fixed SG&A costs do not vary with sales volume e.g. rent for sales office, managers salaries, sales staff salaries Variable SG&A costs- vary in proportion with sales volume, e.g. sales commissions (computed as percentage of sales) Period costs are expensed in the period when they incurred Product costs flow through inventory accounts, expensed when the product is sold Contribution margin statement separates fixed costs from variable costs Account classifications advantages are that it is accurate if done well
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Account classifications disadvantages are that it is time-consuming, subjective judgment in classifying variable and fixed costs Advantages of high low method is that it is simple and doesn’t require detailed costs data Disadvantages of high low method are that it gives only rough estimated of FC and UVS Could be outliers in process Advantages of regression analysis uses all available data and doesn’t require detailed costs data Disadvantages of regression analysis are that its more difficult than the high low method
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