What are the different cost analysis methodologies?

What are the different cost analysis methodologies?

There are several cost analysis methodologies, including Activity-Based Costing, Life Cycle Costing, and Standard Costing. Would you like to know more about any specific one?

Can you explain Activity-Based Costing?

Activity-Based Costing (ABC) assigns costs to products based on the resources they consume. It helps in identifying profitable products and services.

What are the advantages of using Life Cycle Costing?

Life Cycle Costing considers all costs associated with a product over its entire life span, helping in better long-term financial planning.

How does Standard Costing work?

Standard Costing involves assigning a fixed cost to products based on expected costs, which helps in budgeting and variance analysis.

What methodology is best for small businesses?

For small businesses, Activity-Based Costing can be beneficial as it provides detailed insights into cost drivers, helping in better decision-making.