Explore BrainMass

Explore BrainMass

    Effects of Altering Cost Behavior in Cost Accounting

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Given the attached list of fixed, variable, and semi variable costs, please help me explore the possibility of altering the cost behavior of two cost components. I need to come up with a way to change a variable cost to a fixed cost, or a fixed to variable, semi to fixed. I need two examples. Please help me understand the pros and cons of altering this cost behavior of these cost components.

    For example, Advertising is listed as a "variable" cost. If the company chose to outsource advertising, lets say a 5 year contract at 100k per year, this would change to a fixed cost. What would be the pros and cons?

    © BrainMass Inc. brainmass.com March 5, 2021, 12:39 am ad1c9bdddf


    Solution Preview


    In determining whether the behavior, of a cost, can be changed it must be first determined whether the cost can be readily influenced by the firm or organization. A cost can only be influenced if the firm can decide to change its time of effect or total amount charged for a period.

    1. Waste disposal: Waste disposal would include all expense incurred in the disposal and packing of waste material. This may be a fixed cost that can be changed to a variable cost. This would involve negotiating a contract that would involve waste collections that are influenced by the quantity and number of times of disposal.
    A major advantage, of changing a fixed cost to ...

    Solution Summary

    The expert examines the effects of altering cost behavior in cost accounting.