Account analysis-high low method-cost estimation method, Managerial Accounting

Account analysis (Inspection of accounts) method:

This method requires that departmental managers and the accountant inspect each item of expenditure within the accounts for some output level and then classify each of these items as wholly fixed, wholly variable or mixed.

A single average unit cost figure is selected for the items categorized as variable whereas a single total cost for the period is used for the items categorized as fixed.

Mixed costs are decomposed into their variable and fixed components.

High low method (Two point method):

Under this method, records of costs in the previous period are reviewed and the costs of 2 periods are selected. These are the period with the highest level of outputs and the period with the lowest output. A line passing through these two points is then established and used in estimating costs.

Posted Date: 12/4/2012 7:40:07 AM | Location : United States







Related Discussions:- Account analysis-high low method-cost estimation method, Assignment Help, Ask Question on Account analysis-high low method-cost estimation method, Get Answer, Expert's Help, Account analysis-high low method-cost estimation method Discussions

Write discussion on Account analysis-high low method-cost estimation method
Your posts are moderated
Related Questions
How marginal costing would improve the problems faced in absorption costing on manipulation of profits.

After going through this section, you must be capable to: Know the need for establishing sound credit policy; Identify the different credit policy variables; Know the cred


Manufacturing cost data for Sassafras Company, which uses a job order cost system, are presented below. Indicate the missing amount for each letter. Assume that in all cases manufa

Determine the Inputted cost It is hypothetical cost required to be considered to make costs comparable. It is the owner of the factory charges rent of the factory to the cost

Planning, Directing, and Controlling A clever sign hanging on the wall of a business establishment: "The Managers are paid to manage the work-- If There Were No Problems we wou

QUESTION 1: P A RT A You are the Cost Accountant of an industrial concern and have been assigned the duty of preparing a cost accounting system. Initially it has been de

Battle of the Sexes game To understand Battle of the Sexes game, let’s consider a story as follows: Two players (a couple) wish to go to an event together but disagree about

Steps making DecisionTree A decision tree is a graphical representation of decision process indicating decision alternatives, states of nature, related probabilities and condit

This variable deals along with the granting of credit. On one great all the customers are granted credit and conversely, none of them are granted credit irrespective of their credi