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Assigning Costs and Assets After identifying its value chain, a firm must assign operating activity and assets to value activities. Operating costs must be assigned to the act
Under this method, approximation is made of payments and cash receipts in the ensuring period. The dissimilarity of these payments and receipts indicates deficiency or surplus of c
Incremental budgeting This is used to describe an incremental cost approach to budgeting where the next period budget is based on the current year’s results plus an extra amou
Creditors turnover ratio ( or payables turnover ratio) Meaning: this ratio establishes a relation ship between net credit purchases and average trade creditors. Objective
Explain Current budgets Current budgets: the period of current begets is generally of months and weeks. These budget relate to the current activities of the business. According
The Knapp Company needs to predict the labor cost in producing small carrot patch dolls. The following production information is available: Year Dolls Pr
Explain product cost Product costs are those costs which are associated with and directly identifiable with the product. In other words, which are assigned to the product are p
MAKE OR BUY DECISIONS UNDER LIMITING FACTORS One reason for buying products/services from another organisation is the scarcity of resources, so that the company may be unable t
Illustration of short-term decisions These are, to a significant extent, determined by the excellence of the firm's long-term decisions. Illustration of short-term decisions in
Difference between budgetary control and standard costing Budgetary control The budgets are prepared for the concern as a whole. The budgets are fixed on the basis of p
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