We can calculate using following methods 1 - High-Low method 2 - Regression analysis method 3 - Graphical method
Average Cost Method: Under this method average cost is calculated by following farmula:Average cost of unit= Total cost of inventory / total number of units
depreciation is classed as a fixed cost when using only the straight line method. reducing balancing method is classed as a variable cost.
Revenue can be misstated by manipulating the Total Estimated Cost (or Estimate At Completion)
how does the direct method of cost allocation work
We can calculate using following methods 1 - High-Low method 2 - Regression analysis method 3 - Graphical method
Average Cost Method: Under this method average cost is calculated by following farmula:Average cost of unit= Total cost of inventory / total number of units
The high-low method is a technique used to separate fixed and variable costs within a mixed cost. By comparing the highest and lowest activity levels and the corresponding total costs, this method allows you to estimate the fixed and variable components of a cost.
First of all total cost of product is identified and after that using high and low method variable and fixed costs are segregated
firstly, like this.... Secondly, like that... and then, like this... Lastly, get ur answer, congratulation!!
depreciation is classed as a fixed cost when using only the straight line method. reducing balancing method is classed as a variable cost.
NO
Fixed Cost - costs that do not vary with the quantity of output produced.The best example I can think of is when making Chocolate Chip Cookies. You need ingredients and supplies to make them:Chocolate Chips (Variable Cost)Flour (Variable Cost)Butter (Variable Cost)Sugar (Variable Cost)Eggs (Variable Cost)Vanilla (Variable Cost)Baking Soda (Variable Cost)Salt (Variable Cost)Bowls (Fixed Cost)Spatulas (Fixed Cost)Oven (Fixed Cost) The gas or electricity would be a variable costBaking Sheet (Fixed Cost)Cooking Rack (Fixed Cost)Mixer (Fixed Cost)Fixed Costs do not vary with Quantity. Variable Costs do vary with Quantity.
Total Cost
hell
Coness
level of output to look at the total revenue and total cost curve directly