Cost Classification
Cost are divided into three
1. Variable Cost
2. Fixed Cost
3. Mixed Cost or Semi Variable Cost or Semi Fixed Cost
Variable Cost – Material, Labor and variable – Per unit
Fixed Cost – Rent and Salary – Value
Mixed Cost – Telephone and Salesman Package – Value + Per unit
Budget
1. Planning or Static or Standard Budget – Standard Price and Standard Quantity
2. Flexible Budget – Standard Price and Actual Quantity
Comparison
Planning Budget compared with Flexible Budget – Activity Variance
Flexible Budget compared with Actual – Revenue and Spending Variance
A Performance Report Combining Activity and Revenue and Spending Variances
Variance – Difference
Revenue – Favorable and Unfavorable
Expense – Favorable and Unfavorable