Measurement concepts

Free IMA CMA Part 1 (Financial Planning, Performance, and Analytics) lesson in Cost Management. 14 min read, ~2,032 words.

Fixed costs are constant in total within the relevant range; variable costs are constant per unit; mixed costs follow y = a + bx (so fixed cost per unit falls as volume rises). Cost drivers must have a causal link to the pool, not just correlation; the driver anchors every...