Costing techniques Flashcards
What is the behaviour of variable costs
Increases as the kevel of activity increases
What is the behaviour of fixed costs
Stays the same as the level of activity increases
What is the behaviour of semi variable costs
Contains both fixed and variable costs
What is the behaviour of stepped costs
Remains fixed over a certain level of activity but increases if activity goes beyond that level
What is high low method
If a semi variable cost has occurred its used to determine the estimate for budgeting purposes
Variable costs per unit = change in total cost / change in kevel of production
Fixed cost = total cost - (vc x units produced)
What is the break even point formula?
Fixed costs / contribution per unit
Marginal costing
Fixed costs only
Absorption costing
Used on financial statement…all costs
