Tag Archives | Cost Analysis

Marginal Cost Analysis | Cost Analysis | Cost Accounting

In this article we will discuss about the marginal cost analysis. Marginal cost analysis requires analysis of cost into fixed and variable elements. Suppose that selling price per unit of a product is Rs.100 and variable cost per unit is Rs.60. Contribution per unit is Rs.40. You may say contribution as gross margin. Profit Volume ratio (P/V ratio): P/V ratio [...]

By |2017-05-16T19:21:36+00:00May 16, 2017|Cost Accounting|Comments Off on Marginal Cost Analysis | Cost Analysis | Cost Accounting

Top 7 Applications of Differential Cost

The following points highlight the top seven practical applications of differential cost. The practical applications are: 1. Determination of the most Profitable Level of Production and Price 2. Acceptance of Offer at a Lower Price or Offering a Quotation at Lower Selling Price in Order to Increase Capacity 3. Accept or Reject Decisions 4. Make or Buy Decisions 5. Sell [...]

By |2016-06-18T06:58:42+00:00June 18, 2016|Cost Analysis|Comments Off on Top 7 Applications of Differential Cost

Difference between Relevant Costs and Irrelevant Costs

The upcoming discussion will update you about the difference between relevant costs and irrelevant costs. In order to exercise cost control, managers must be able to make distinction between relevant costs and irrelevant costs. Costs that are affected by the managerial decisions are known as relevant costs and those costs that are not affected are treated as irrelevant costs. Irrelevant [...]

By |2016-06-18T06:58:42+00:00June 18, 2016|Cost Analysis|Comments Off on Difference between Relevant Costs and Irrelevant Costs
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