Week 2: Understanding Cost Behaviour
by Chung Phan
1. 2.9 Allowing for a margin of safety
1.1. Margin of safety formulas
1.2. In terms of percent
2. 2.8 Calculating after-tax profit
2.1. Before tax profit
2.2. After-tax profit
3. 2.7 Applying break-even analysis
3.1. Break-even in terms of units
3.2. Break-even in terms of revenue
4. 2.6 Applying cost-volume-profit analysis (CVP)
4.1. assume a simple linear cost structure
4.2. Concept
4.3. Profit equation
5. Case study: MealKit4U
5.1. For each type of cost (fixed, variable and mixed), identify three examples that MealKit4U might have?
5.2. Maintaining a hotel room on average cost = $70. During off-season, reject an offer of $70 is a good decision?
5.3. Give examples of opportunity cost from your past decisions?
6. 2.5 Identifying relevant costs
6.1. Relevant costs
6.2. Sunk costs
7. 2.1 Understanding key cost terms
7.1. Key cost terms
7.1.1. Cost behaviour
7.1.2. Relevant range
7.1.3. Cost object
7.1.4. Cost driver
7.2. Key cost definitions
7.2.1. Fixed costs
7.2.2. Variable costs
7.2.3. Mixed costs
7.2.4. Relevant range