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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Cost estimation is a fundamental aspect of managerial/cost accounting (Datar et al. 2008; Eldenburg and Wolcott 2005). The cost predictions are used in each of the management functions. for example used to predict costs so that management can determine the desirability of alternative options and to budget expenditures‚ profits‚ and cash flows. The objective is to support students in learning how to apply regression analyses to understand cost behavior and forecast future costs using real data from
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than the cost of capital. The cost of capital is the rate of return that capital could be expected to earn in an alternative investment of equivalent risk. If a project is of similar risk to a company’s average business activities it is reasonable to use the company’s average cost of capital as a basis for the evaluation. A company’s securities typically include both debt and equity‚ one must therefore calculate both the cost of debt and the cost of equity to determine a company’s cost of capital
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Cost Benefit Analysis A cost benefit analysis is done to determine how well‚ or how poorly‚ a planned action will turn out. Although a cost benefit analysis can be used for almost anything‚ it is most commonly done on financial questions. Since the cost benefit analysis relies on the addition of positive factors and the subtraction of negative ones to determine a net result‚ it is also known as running the numbers. A cost benefit analysis finds‚ quantifies‚ and adds all the positive factors. These
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PRODUCT PLACEMENTS The Impact of Placement Type and Repetition on Attitude Pamela Miles Homer ABSTRACT: The global market for product placement‚ the practice in which firms pay to place branded products (e.g.‚ brand name/logo‚ package‚ signage‚ other trademarks) in the content of mass media programming‚ has exploded. A pair of studies test two potential moderating factors that may help account for the lack of attitude change reported in past experimental studies of placement effects. Specifically
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economics and business decision-making‚ sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs‚ which are future costs that may be incurred or changed if an action is taken. Both retrospective and prospective costs may be either fixed (continuous for as long as the business is in operation and unaffected by output volume) or variable (dependent on volume) costs. Note‚ however‚ that many economists consider
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permitted. General scope and definitions The IASB has amended the list of costs that can be included in borrowing costs‚ as part of its 2008 minor improvement project. Will this change anything in practice? The amendment should eliminate inconsistencies between interest expense as calculated under IAS 23R and IAS 39. IAS 23R refers to the effective interest rate method as described in IAS 39. The calculation includes fees‚ transaction costs and amortisation of discounts or premiums relating to borrowings
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treatment for share issue costs As you requested‚ I have researched the accounting issue‚ regarding the proper accounting treatment for the share issue costs. I hope this recommendation will be of assistance to you. Share issue cost: A corporation may incur miscellaneous costs that are related directly to issuing its capital stock. When related to the initial issuance of stock at incorporation‚ the corporation records these costs as an expense. On the other hand‚ the costs related to later issuances
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colossal giants crumbling to their knees. The prime aim is to throw light at the subtle inconsistencies that can cost the companies far more than just money but their entire image. The asset of ‘good will’ has its nemesis in these unethical practices surfacing. Management accountants work inside a company‚ handling all internal accounting data. These individual often allocate production costs‚ create management reports and provide support for managerial decisions. Ethical issues can result from managerial
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COST SHEET – FORMAT |Particulars |Amount |Amount | |Opening Stock of Raw Material | *** | | |Add: Purchase of Raw materials |*** | | |Add: Purchase Expenses
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