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Account analysis method is related to costing of different products while producing. In accounts, it is very responsible work to estimate cost properly. Moreover, for students, it is somehow important to know that how to estimate the cost. So, account analysis method is very significant part of study.

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Analyzing in account is important to update an account periodically. The prime aim of analyzing is to measure the behavior of the cost of a firm. It means the complete comprising of item list is examined and with the help of costing a firm understands its value.

**Explanation of account analysis method**

Account analysis method is perfect for estimating various costs related to a product while producing. At the moment a manager estimates a cost, he divides the appropriate cost into different categories. These are mainly three as –

**Variable**– This cost increases when production for products increases.**Fixed**– This type of costs always remain fixed no matter how much production gets increased. ‘Property taxes’ for a manufacturing plant is a very good example of it.**Mixed**– This is a combination of both categories. These are fixed as well as variable cost that you cannot separate.

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**What is the exact purpose of accounting analysis method? **

The chief purpose of this method is to derive cost. This is possible when you use algebraic expression by using all three categories together. With the help of proper process and knowledge about these processes along with production, the team takes many decisions. There is only one behavior that is suitable to estimate the cost when only data of one period is considered.

Our **account analysis method homework help **can easily explain the above explanation with an example.

**What is the exact formula for variable cost? **

Variable cost per unit is important to know, but before that, all costs as fixed and variables are known and then totaled. Variable cost is necessity part and requires calculating as –

Variable cost per unit = Total Variable Cost / number of unit produced and sold

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