what are the 2 types of costs?
- Fixed Cost vs Variable Cost
- Discretionary Fixed Cost - Cost that you may choose to avoid dying the short run, however continued avoidance will generally cause problems. i.e. educational cost)
- Step Costs
- Mixed Costs
what is the formula for total cost?
TOTAL COST = FIXED COST + (VARIABLE COST PER UNIT X UNIT SALES)
what are the 3 ways of determining mixed costs?
High/Low Two Point Method
Scatter Diagram
Regression Analysis
what is high/low two point method?
Pick extreme two month (High and Low) and compute the difference. Then Variable cost = Mixed Cost Difference / Rooms Sold Difference
This number X Rooms sold = Variable Cost
what is scatter diagram?
can be used to visualize the relationship between activities and costs
what is regression analysis?
Most sophisticated method to determine appropriate fixed-variable cost
what is relevant cost?
Differential Cost. (Quantified and incurred in the future)
what is sunk cost?
Not considered into decision making because they were already incurred
what is controllable costs?
Controllable Costs - costs can be regulated
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Chapter 11 Cost Approaches to Pricing8
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Chapter 12 - Internal Control4
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Chapter 1 - Introduction to accounting24
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Chapter 2 - Accounting for Business Transactions3
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Chapter 3 - Accounting Adjustments6
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Chapter 4 - Corporate Accounting10
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Chapter 5 - Balance Sheet15
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Chapter 6 - Income Statement3
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Chapter 7 - The statement of cash flow9
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Chapter 8 - Introduction to Managerial Accounting3
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Chapter 9 - Basic cost concepts9
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Chapter 10 - Cost Volume Analysis4
