When encountering a semi-variable cost, the fixed and variable amounts need to be separated. In a simple dataset, this can easily be achieved using the high-low method. As the data gets more noisy, we need to use statistical methods, and for these, we use the scattergraph and regression analysis. In this example, the…
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Understanding different types of cost
A comprehensive understanding of cost can be used by managers to identify all of the relevant costs of an organisation. With this knowledge one is better positioned to forecast future cost and revenue. What is the basis for measuring cost? A cost unit is the unit of measurement used to express the cost of a…
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Management accounting for planning, control, and decision making
The purpose of management accounting (MA) is to provide the insights necessary for effective planning, control, and decision making. MA is a discipline within finance and a business skill that managers can use in their short to long-term planning and reporting activities for the control, creation, and maintenance of value. A business manager needs to…
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Analysing an industry with the 5-forces model
Michael Porter’s 5 forces strategic analysis model is a business strategy tool that helps analyse the competitive forces at play in any industry. The model is especially useful for evaluating industry attractiveness and profit potential. I recently applied this model to an industry I don’t work in directly and found the insights I gathered extremely…
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Creating a personal development plan
In the next 5 years, we will continue to witness the impact of technological advances and the integration of artificial intelligence into the workplace. New product developments, technological advances, and the constant changing nature of work will continue to require the employee to keep their skills and knowledge up to date. The sources of development…
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Transition planning for achieving success in a new role
What is a transition plan and why is it important In 2019, a colleague recommended Michael D. Watkins’ book “First 90 Days” to me when I was transitioning from one department to another within my company (Watkins, 2013). As an outsider starting a new role, you possess a fresh perspective that enables you to…
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Leadership: Developing as a leader
What is leadership? Leadership is a term often quoted in the workplace. Leadership is broadly understood from the employee’s point of view as something you should be engaging with to grow your career. But what does this mean for the individual and the organisation, practically speaking? Leadership can be defined as the way in which…
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