Accounting Management

The margin of Safety Ratio (M/S Ratio) The excess of actual or budgeted sales over the break-even volume of sales is called the margin of…

CPV analysis is a powerful tool that helps managers understands the relationships of cost volume and profit. Cost volume profit (CVP) analysis is the relationship…

Usages of variable / direct costing in decision making: Under variable costing, only those manufacturing costs that very without put are treated as product costs.…

Manufacturing overheads are indirect costs of a product. If they are direct costs, they won’t be termed overheads. Manufacturing overhead (also referred to as factory…

Differentiate between Absorption and Variable Costing Absorption Costing means that all of the manufacturing costs are absorbed by the units produced. In other words, the…

Classify Costs according to managerial decision making Cost behavior refers to how a cost will change as the level of activity change. Costs require the…

Relevant Range pertains to Fixed Costs, not Variable Costs The relevant range refers to a particular activity level that is enclosed by a minimum and…

Variable cost is constant if expressed on a per unit basis. Direct material, direct labor, and variable overhead are all variable costs. Here briefly describe…

Product versus Period Cost A manufacturer’s production costs are the direct materials, direct labor, and manufacturing overhead used in making its products. (Manufacturing overhead is…

Step Variable Cost The step-variable costs are basically fixed within a narrow range but distinct increase when there are volume increases. It is a cost…