Card Set Information
Cost Concepts, High Low Method, CM and BE
Supports the internal planning decisions made by management.
Has more of a scorekeeping, historical orientation that provides information to owners and others outside the organisation.
Typical Variable Costs:
Factory water, power, light
Typical Fixed Costs:
Total Cost Formula:
Total Cost = Fixed Cost + Variable Cost
High/ Low Method:
Highest Cost - Lowest Cost
Hightest Units - Lowest Units
Y = a + bx
What does it mean?
TC = Fixed Cost + (Variable Cost x Units)
What is the Contribution Margin Format?
What is the Contribution Margin Ratio?
Break-Even is when:
Revenue = Expenses
Break-Even point in units:
Break-Even point in dollars: