Cost Accounting incl. Full vs. Variable Costing; Budgeting & Financial Planning

1. What is the impact of volume changes in planned capacity on overhead surcharges? How are planned capacity and overhead surcharges connected in general?

2. What are the assumptions around cost/profit impacts of volume changes in full and in variable costing? Which one is more realistic under what circumstances and why?

3. What are the assumptions around costs per unit in full and in variable costing? Which one is more realistic under what circumstances and why?

4. What is the main goal of allocating costs, direct and indirect? From that perspective, do you want to overhead surcharges to be as high or as low as possible?

5. What are the pros & cons of full and variable costing? In what situations would you prefer the one or the other and why? 6. What is the contribution margin and how is it calculated?

6. Explain what the break-even point is?

7. Name axes and graphs in the break-even diagram, add. variable costs.

8. Briefly explain the concept of operating leverage. What does it compare and what risk for a company does it express?

9. What are pros and cons of forecasts and budgets, also (but not only) from a psychological perspective?

10. What are the two main dimensions you can anaylze budget deviations with regards to revenues and variable costs?