Cost by Behavior
By Yuriy Smirnov Ph.D.
March 19, 2018Fixed cost remains constant within a specified relevant range and does not change depending on business activity. In other words, the amount depends on the accounting period ...
read moreCost by BehaviorBy Yuriy Smirnov Ph.D.March 19, 2018Variable cost changes in direct proportion to production output or business activity. In other words, the amount increases when production volume grows and declines when ...
read moreCost by BehaviorBy Yuriy Smirnov Ph.D.March 19, 2018Mixed cost, also referred to as semivariable cost, combines the behavior of both fixed cost and variable cost. In other words, some of their components behave like fixed cost, and others behave ...
read moreCost by BehaviorBy Yuriy Smirnov Ph.D.March 19, 2018The high-low method is one of several techniques used in managerial accounting to split mixed cost into fixed components and variable components ...
read moreCost-Volume-Profit AnalysisBy Yuriy Smirnov Ph.D.March 19, 2018The contribution margin (CM) is an accounting concept used in cost-volume-profit analysis to estimate the profitability of a specific product or service. It can be defined as per unit amount ...
read moreCost-Volume-Profit AnalysisBy Yuriy Smirnov Ph.D.March 19, 2018Break-even analysis is a technique widely used by management accountants to determine the sales volume, also known as the break-even point, that allows restoration of all ...
read moreCost-Volume-Profit AnalysisBy Yuriy Smirnov Ph.D.March 19, 2018A sales mix is a set of proportions of each product in total sales if a business sells multiple products. Furthermore, these products are not equally profitable for a business ...
read moreCost-Volume-Profit AnalysisBy Yuriy Smirnov Ph.D.March 19, 2018Degree of operating leverage (DOL) is a ratio showing the percentage in EBIT (Earnings before Interest and Taxes) also referred to as operating income in response to the change in sales by ...
read moreCost-Volume-Profit AnalysisBy Yuriy Smirnov Ph.D.March 19, 2018Target profit analysis is part of cost-volume-profit analysis, with the main objective being to determine the sales level covering fixed costs and variable costs that ...
read moreCost-Volume-Profit AnalysisBy Yuriy Smirnov Ph.D.March 19, 2018Companies selling a single product are rare in business practice. More often companies sell many different products. The main objective of target profit analysis with ...
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