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ACCA F5 ACCA P5 MANAGEMENT ACCOUNTING

What is meant high low method?

High low method is the method of segregating semi variable cost which is based on the analysis of the past records of expenses. This method take into account only the highest and the lowest values contained in the data in order to determine the rate of cost change and thereafter variable cost. The variable cost is then deducted from the total cost to get fixed cost.   read more

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ACCA F5 ACCA P5 MANAGEMENT ACCOUNTING

What is variable costs?



Variable cost is the cost which, in aggregate, tend to vary in direct proportion to changes in volume of output or turnover. =&0=&

  • Linear variable cost or engineered cost. this is one in which relationship between variable cost and output can be shown as straight line in the graph.
  • Non linear or curve linear variable cost. this occur when the relationship between variable cost and output can be shown as curved line on the graph.
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    MANAGEMENT ACCOUNTING ACCA F5 ACCA P5

    What is fixed cost?

    What is fixed cost?

    Fixed cost is the cost which accrue in relation to passage of time and which within certain output or turnover limit  (relevant range), tend to be unaffected by fluctuations in the level of activity, that is output or turnover. read more

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    MANAGEMENT ACCOUNTING ACCA F5 ACCA P5

    What is meant by normal standard?



    In standard costing normal standard is the average standard which it is anticipated can be attained over a future period of time, preferably, long enough to cover one trade cycle. Accordingly, this standard may be prepared once in 10 years. read more