Below article describes the meaning of operating leverage, some of the ratios to measure operating leverage, its application and users and an illustrated example on how to compute operating leverage. (a) Meaning of Operating Leverage: Refers to the existence of fixed costs in a company’s cost structure Is used to measure operating risk (b) Following [...]
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Append below a list of articles under the heading of Cost Behaviour(Managerial Accounting): Cost Unit Versus Cost Centre The Difference Between Allocation And Apportionment How Costs Being Classified Product Costs Versus Period Costs Direct Costs Versus Indirect Costs Fixed, Variable And Mixed Costs
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Another basic term commonly confused by manager is Cost Unit & Cost Centre. Like allocation and apportionment, don’t confuse the term:- A Cost Unit Is the quantitative unit of product or service in relation to which costs can be ascertained. Examples: Jobs, contracts, kilowatt hours, cost per patient day Cost Centre Is [...]
Very often, managers used allocation and apportionment interchangeably when discussing on how to charge out cost to the relevant centers. So let’s look at the difference:-
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Before managers can focus on making any decision making, one of the crucial element is the need to under the various cost behavior. The following are discussed: Variable, Fixed & Mixed Costs(Part1) Direct Versus Indirect Costs(Part2) Product Versus Period Costs(Part3) HOW ARE COSTS BEING CLASSIFIED(PART4) Here in this Part 4, we shall learned about how [...]
Before managers can focus on making any decision making, one of the crucial element is the need to under the various cost behavior. The following are discussed: Variable, Fixed & Mixed Costs(Part1) Direct Versus Indirect Costs(Part2) PRODUCT VERSUS PERIOD COSTS(PART3) How Are Costs Being Classified(Part4) Here in this Part 3 the difference between Product and [...]
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Before managers can focus on making any decision making, one of the crucial element is the need to under the various cost behavior. The following are discussed: Variable, Fixed & Mixed Costs(Part1) DIRECT VERSUS INDIRECT COSTS(PART2) Product Versus Period Costs(Part3) How Are Costs Being Classified(Part4) This Part 1 discussed the various cost behavior-
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Before managers can focus on making any decision making, one of the crucial element is the need to under the various cost behavior. The following are discussed: VARIABLE, FIXED & MIXED COSTS(PART1) Direct Versus Indirect Costs(Part2) Product Versus Period Costs(Part3) How Are Costs Being Classified(Part4) This Part 1 discussed the various cost behavior-variable,fixed and mixed [...]
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