Chapter four f4教材.docVIP

Chapter four Cost behaviour Introduction to cost behaviour Cost behaviour and decision-making Cost behaviour is the way in which costs are affected by changes in the volume of output. Cost behaviour and cost control Cost behaviour and budgeting Knowledge of cost behaviour is obviously essential for the tasks of budgeting, decision making and control accounting. Cost behaviour and levels of activity Cost behaviour principles The basic principle of cost behaviour is that as the level of activity rises, costs will usually rise. It will cost more to produce 2,000 units of output than it will cost to produce 1,000 units. Example: cost behaviour and activity level Hans Bratch has a fleet of company cars for sales representatives. Running costs have been estimated as follows. (a) Cars cost $12,000 when new, and have a guaranteed trade-in value of $6,000 at the end of two years. Depreciation is charged on a straight-line basis. (b) Petrol and oil cost 15 cents per mile. (c) Tyres cost $300 per set to replace; replacement occurs after 30,000 miles. (d) Routine maintenance costs $200 per car (on average) in the first year and $450 in the second year. (e) Repairs average $400 per car over two years and are thought to vary with mileage. The average car travels 25,000 miles per annum. (f) Tax, insurance, membership of motoring organisations and so on cost $400 per annum per car. Required Calculate the average cost per annum of cars which travel 15,000 miles per annum and 30,000 miles per annum. Solution Costs may be analysed into fixed, variable and stepped cost items, a stepped cost being a cost which is fixed in nature but only within certain levels of activity. (a) Fixed costs $ per annum Depreciation $(12,000-6,000) ÷ 2 = 3,000 Routine maintenance $(200 + 450) ÷ 2= 325 Tax, insurance etc 400 Total 3,725 (b) Variable costs Cents per mile Petrol and oil 15.0 Repairs ($400 ÷ 50