ACCT 2101 Lecture Notes - Lecture 4: Big Data, Cost Estimate, Fixed Cost
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ACCT 2101 Full Course Notes
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How much are we actually paying for stuff. How much will it cost in the future. The more you spend, the more you get. The price stays the same for a certain amount of activity then jumps. Like rent- stays the same for as much as produced. The higher the activity, the better bang for the buck. It will stay fixed for a longer level of production, then eventually moves up. The certain square feet can produce a certain amount of cookies. Electric bill has a low steady fee. The variable is the amount of electricity used. We"re looking at the numbers on an account basis and eyeball a future number. Make a graph, graph the points, eyeball accurate line. The y intercept should be total fixed cost. Units and costs for high and low activity levels for month. Mx= total variable cost b=total fixed cost (y-intercept) Difference in cost/difference in activity = slope.