To better understand its cost structure, the company has recently appointed an external consultant to analyze its costs and identify the variable cost per seminar and the total fixed cost per month. In the preliminary meeting, the external consultant told the company's management that variable cost per seminar and total fixed cost per month could be calculated by using the high-low method as well as the least-square regression method. The company's management said that they want to see results in both methods and wonder whether and why the results might differ between these two methods. The company also wants to know the total costs for delivering 28 seminars in July.

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A: Perpetuity: It is a stream of cash flow that is presumed to continue for an indefinite period.

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A: The t-accounts are as follows:

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A:

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A: Net revenue = Gross profit + Cost of goods sold Operating expense = Net revenue x 15%

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.