Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 3, Problem 1DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Kendall Company has sales of 1,000 units at $60 a unit. Variable expenses are 30% of the selling price. If total fixed expenses are $30,000, the degree of operating leverage is

i need this question answer General accounting question

At an output level of 19,500 units, you have calculated that the degree of operating leverage is 2.92. The operating cash flow is $66,300 in this case. Ignoring the effect of taxes, what are fixed costs? Provide answer

Answer 2

Textbook Question

Chapter 3, Problem 1DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 3, Problem 1DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 3, Problem 1DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Answer 8

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Answer 12

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Answer 13

Ch. 3 - Why is knowledge of cost behavior important for...Ch. 3 - How does the length of the time horizon affect the...Ch. 3 - Prob. 3DQ Ch. 3 - What is the relationship between flexible...Ch. 3 - What is the relationship between committed...Ch. 3 - Describe the difference between a variable cost...Ch. 3 - Why do mixed costs pose a problem when it comes to...Ch. 3 - Why is a scattergraph a good first step in...Ch. 3 - What are the advantages of the scatterplot method...Ch. 3 - Prob. 10DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Videos

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions