Cost Behaviour

Cost Behavior Assignment help

Cost Behavior refers to the way by which various types of Cost Changes whenever there is a change in the production Activity. We have best experts to provide cost behavior assignment help to students. Generally there can be 3 types of cost Behavior that can be categorized in terms of their Behavior:

1) Fixed Costs:It refers to those types of Cost which does not have any change when there is a change in the productivity level. These are such types of cost which are definite to incur whether there is any production or not.

Examples of Such Cost includes Rent Cost, Salary Cost,and Depreciation Cost etc.

 

Total Fixed Cost

 

50000 50000 50000
 

Number of Units Produced

 

10000 20000 30000
Fixed Cost 50000 50000 50000

This clearly shows that irrespective of Production Total Fixed Cost would always be same.

2) Variable Costs: It refers to those types of Costs which varies with the level of production. It is direct proportional to the level of production. When there is increase in the level of Production, Variable Cost will increase and when there is decrease in the level of production, Variable Cost will decrease.

 

 

Total Variable Cost

 

20000 40000 60000
 

Number of Units Produced

 

10000 20000 30000
Variable Cost per Unit 2 2 2

 

This clearly shows that irrespective of Production Variable Cost per unit would always be same.

3) Mixed Cost, often referred as Semi-Variable Cost: Mixed Cost are basically combination of both the Components i.e. Fixed as well as Variable Cost. Mixed Cost can be best explained with the help of an example such as Telephone Bill. For Example : In case of telephone bill , even if any customer does not talk for certain time , customer is abide to pay Fixed Charges and if Customer Crosses certain time , Customer has to pay Charges in terms of additional minutes .In this example , Fixed Charge is Fixed cost and additional minutes charges are variable cost . Hence it is combination of both the cost, therefore known as Mixed Cost. Some of the very famous techniques to ascertain mixed costs are Regression Analysis, Scatter Diagram Method, High-Low method etc.

Total Cost

 

 

15000 25000 35000 45000 55000
 

Number of Units Produced

 

 0  1000 2000 3000 4000
Fixed Cost 15000 15000 15000 15000 20000
Variable Cost per unit  Not Determinable 10 10 10 10

When we analyze this example, it is quite clear that up to 1500 units of production total Cost is 15000 Fixed, but once the production crosses 1500 units, for every additional unit there is an additional Cost of Rest 10 per unit. Hence, this is a combination of both Fixed as well as Variable Cost, which can be termed as Mixed Cost.

Cost behaviour
Cost behaviour

Cost Behavior Assignment Help is one of the most basics Cost Accounting Homework requirement for the Students as they get confused in segregating different types of Cost , Experts at Assignment Consultancy Inc. are available 24/7 for solving all types of Cost Behavior Homework help and also helping Students to learn the concepts in an easy understandable language.

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