Chapter 5 - Cost behavior: Analysis and use. After studying Chapter 5, you should be able to: Understand how fixed and variable costs behave and how to use them to predict costs, analyze a mixed cost using the high-low method, analyze a mixed cost using the scattergraph method, prepare an income statement using the contribution format.
This book is about how to model the behaviour of complex projects. It isn’t about how to manage projects—although you’ll be expected to know the basics of project management—and reading this won’t make you into a better project manager. This book is written for analysts and workers in project management who find themselves needing to model how a project behaves.
This book is directed toward the businessperson who must have financial and
accounting knowledge but has not had formal training in finance or accounting —
perhaps a newly promoted middle manager or a marketing manager of a small
company who must know some basic finance concepts. The entrepreneur or sole
proprietor also needs this knowledge; he or she may have brilliant product ideas,
but not the slightest idea about financing.
All of this highlights the desirability of a framework that will identify priorities for
improved environmental accounting. This paper derives such a framework by exploring the
determinants of the value of information in a corporate decision-making context. The paper
proceeds as follows. The next section defines environmental accounting and the meaning of
"improved" information, and discusses the costs associated with those improvements. Section 3
describes the economic value of information in general terms.