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Discretionary fixed costs and Semi variable costs
Discretionary fixed costs are those which are incurred as a result of management discretion. These costs have two important features viz.
They arise from periodic (usually yearly) decisions regarding the maximum outlay to be incurred, and they are not tied to a clear cause and effect relationship b/w inputs and outputs. For examples of discretionary fixed costs includes advertising public relations, executives training, teaching, research, health care etc. these costs are controllable.
Semi variable costs: those costs which are partly fixed and partly variable are called semi variable costs. These costs are very with the level of production but not in direct proportion to the level of production. The examples of such costs are depreciation of machinery, maintenance of equipment, administrative costs, etc.
Model Construction The success of a simulation exercise is related to the predictive quality of the underlying model, so that considerable care should be taken with model const
Question: A friend of yours is revising for his examination in management accounting and needs some help from you. He asks you the following questions. Write brief notes on eac
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Explain the External factors of pricing decisions 1) Demand: the market demand for a product or service obviously has big impact on pricing. Since demand is affected by fact
limitation
Rate of return or target pricing method Under this method of price determination first of all a rate of return desired by the enterprises on the amount of profit capital inves
Problem Marginal costing plays a major role in making certain decisions. It provides information to management regarding the behaviour of costs and the incidence of such costs
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Cost-volume relationship utilization Cost-volume-profit study is an estimating concept which can be employed in a variety of pricing circumstances. You can employ the cost-volu
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