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

Ask an Expert

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

Write your message here..

Related Questions

Steps of graphic analysis, Steps of Graphic Analysis There are four ste... Steps of Graphic Analysis There are four steps in using graph paper to study cost-volume relationships: Step 1: Compute the scale which you will use: Volume is considered

Cost, What are the limation of semi variable cost and how to overcome it? What are the limation of semi variable cost and how to overcome it?

Illustrate what the traffic can bear pricing, What the traffic can bear pri... What the traffic can bear pricing Pricing based on what the traffic can bear is not a sophisticated method. It is used by retail traders as well as by some manufacturing firms.

Problrm question, The std cost of chemical mixture~PQ is as follows: 40% of... The std cost of chemical mixture~PQ is as follows: 40% of material P @rs.400/kg 60% of material Q @rs.600/kg A std loss of 10% is normally anticipated in pdn. The followinng parti

Time series analysis, how do i use least squares method to solve semi avera... how do i use least squares method to solve semi average problem?

Dominance, DOMINANCE Dominance strategy is useful for reducing the size... DOMINANCE Dominance strategy is useful for reducing the size of the payoff table. Rules of Dominance: 1) If all the elements in a column are greater than or equal to the

Show process of pricing under decline stage, Q. Show process of Pricing und... Q. Show process of Pricing under decline stage? In this stage the producer should follow the pricing strategy which may fetch revenue not less than its cost of production. If h

Dentify and explain the many classsification of cost, dentify and explain t... dentify and explain the many classsification of cost for planning,control,performance evaluation and decision making

Private sector companies have multiple stakeholders who are, Private sector... Private sector companies have multiple stakeholders who are likely to have divergent interests.( five stakeholder groups and discuss their financial and other objectives).

Explain the ratio analysis according to kosher, Explain the Ratio analysis ... Explain the Ratio analysis according to kosher A ratio is the relation of the amount a to another b expressed as the ratio of a to b; a: b (a is to b) or a as simple fraction i