Question Tag: operating budgets

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MA – Nov 2018 – L2 – Q2a – Relevant cost and revenue

Discuss the relevance of classifying costs as fixed or variable in decision-making processes, with a focus on their relevance or irrelevance to decisions.

Question

Costs may be classified as fixed or variable. This classification method is useful for decision-making because variable costs are relevant costs whereas fixed costs are irrelevant.

Required:
Explain this statement.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budgetary Control, flexible budgeting, operating budgets, Sales Variance, Variance Analysis
Level: Level 2

Topic: Relevant Cost and Revenue
Series: NOV 2018

MA – Nov 2018 – L2 – Q2a – Relevant cost and revenue

Discuss the relevance of classifying costs as fixed or variable in decision-making processes, with a focus on their relevance or irrelevance to decisions.

Question

Costs may be classified as fixed or variable. This classification method is useful for decision-making because variable costs are relevant costs whereas fixed costs are irrelevant.

Required:
Explain this statement.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budgetary Control, flexible budgeting, operating budgets, Sales Variance, Variance Analysis
Level: Level 2

Topic: Relevant Cost and Revenue
Series: NOV 2018

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MA – Nov 2018 – L2 – Q2a – Relevant cost and revenue

Discuss the relevance of classifying costs as fixed or variable in decision-making processes, with a focus on their relevance or irrelevance to decisions.

MA – Nov 2018 – L2 – Q2a – Relevant cost and revenue

Discuss the relevance of classifying costs as fixed or variable in decision-making processes, with a focus on their relevance or irrelevance to decisions.

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