Cost‐Volume Relationships and Changes in Levels of Activity

Abstract

Information provided for managers by an accounting department can be divided into two broad categories: (a) information which will help managers to control future costs incurred, and (b) information which will enable managers to be well‐informed when making decisions involving a choice between alternative courses of action. Both accountants and managers need to understand the way in which costs respond to changes in the level or type of activity if appropriate information is to be presented and used effectively. Furthermore, the ability to employ techniques such as standard costing, budgetary control and marginal costing, which are commonly used in planning and controlling organisations' activities, must be based on an appreciation of the basic relationships between costs and volume.

Citation

Jones, D.M.C. (1974), "Cost‐Volume Relationships and Changes in Levels of Activity", Management Decision, Vol. 12 No. 3, pp. 145-159. https://doi.org/10.1108/eb001046