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COST BEHAVIOUR - Coggle Diagram
COST BEHAVIOUR
Key component of planning & decision making, planning, operating & control
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COST FUNCTIONS
Help managers FORESEE what TOTAL COSTS will be at VARYING OPERATING LEVELS to better plan for the future
MATHEMATICAL DESCRIPTION of how a COST CHANGES with the changes in the LEVEL of an ACTIVITY relating to that cost
Can be plotted on a GRAPH, X axis represents LEVEL OF ACTIVITY and Y axis represents COSTS RELATING to that LEVEL OF ACTIVITY
UNDERLYING ASSUMPTIONS
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RELEVANT RANGE
BAND OF NORMAL ACTIVITY LEVEL where there is a SPECIFIC RELATIONSHIP between the level of activity & the costs
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