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ACTIVITY COST BEHAVIOR, Variable rate = Change in cost/Change in Output,…
ACTIVITY COST BEHAVIOR
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Activities, Resource Usage, and Cost Behavior
Flexible Resources are supplied as used and needed ; they are acquired from outside source, where the term of acquisition do not require any long-term commitment for any given amount of the resource.
Committed Resource are resource tat are supplied in advance of usage ; the are acquaired by the use either an explicit or implicit contract to obtain a given quanity of reasource, regardless of whether the amount of the resource available is fully used or not.
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Implication for Control and Decision Making. The activity-based model just described can improve both managerial control and decisio making. Operational control systems encourage managers to pay more attention to controlling resouceuse and spending.
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