Importance of Segregating Expense.

Q16. What is the importance of segregating expense into fixed and variable cost?
Ans. Importance of segregating expense into fixed and variable are:

  1.  It helps in controlling expenses.
  2. It helps in preparing budget. Flexible budget can be prepared only when expenses can be separated into fixed and variable.
  3.  It assists in marginal costing technique through which most of the decision is taken.

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