The impact on the operating profit due to the varying levels of volume and the costs and determines a break-even point for cost structures with different sales volumes that will help managers in making economic decisions for short term.

It is mostly used in the manufacturing industry since it enhances the reliability of cost data, hence producing nearly true costs and better classifying the costs incurred by the company during its production process.

A raw material that physically incorporated in the finished product.

CF stands for?

Provides an overview of a company's assets, liabilities, and stockholders' equity as a snapshot in time.

It is an expenditure required to produce or sell a product or get an asset ready for normal use.

OE stands for?

This is subject to the control or substantial influence of a particular individual.

COGS stands for?

Involves collecting and analyzing historical data and applying quantitative models, techniques, tools, and databases to predict a program’s future cost.

A cost that changes in total in direct proportion to a change in an organization’s activity.

The first step in Activity Based Cost