November 2008
Beginner
448 pages
11h 33m
English
Content preview from Budgeting Basics and Beyond
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7.6. Conclusion
Nonfinancial managers must investigate cost behavior for break-even and cost-volume-profit analysis, for appraisal of managerial performance, and for flexible budgeting. We have looked at three types of cost behavior—variable, fixed, and mixed. We illustrated two popular methods of separating mixed costs in their variable and fixed components: the high-low method and regression analysis. Emphasis was placed on the use of simple regression. The idea of flexible budgeting was emphasized in an attempt to correctly measure the efficiency of the cost center (e.g., assembly department).
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