Cost comprise impact, Managerial Accounting

Cost comprise impact

Some of the policy choices which tend to have the maximum impact on cost comprise:

  1. Product performance, configuration, and characteristics
  2. Mix and variety of products offered
  3. Level of service provided
  4. Spending rate on marketing and technology development activities
  5. Delivery time
  6. Buyers served (e.g., small versus large)
  7. Channels employed (e.g., fewer, more efficient dealers versus many small ones)
  8. Process technology chosen, independent or scale, timing, or other cost drivers
  9. The specifications of raw materials or other purchased inputs used (e.g., raw material quality affects processing yield in semiconductors)
  10. Wages paid and amenities provided to employees, relative to prevailing norms
  11. Other human resource policies including hiring, training, and employee motivation
  12. Process for scheduling manufacture, maintenance, the sales force and other activities


Though policy choices always play an independent role in determining the cost of value activities, they also frequently affect or are affected by other cost drivers. Process technology is frequently dictated partly by scale and partly by what product characteristics are preferred, for illustration. Furthermore, other cost drivers unavoidably affect the cost of policies. For illustration, an automated ticketing and seat selection system might well be subject to economies of scale which make such a system very expensive for a small airline to accept.

Policies usually play a particularly necessary role in differentiation strategies. Differentiation frequently rests on policy choices which make a firm unique in performing one or more value activities, deliberately increasing cost in the procedure. A differentiator should understand the costs related with its differentiation and compare them to the price premium which results. This can be completed only by isolating the effects of policies on cost.

Posted Date: 12/8/2012 5:59:18 AM | Location : United States







Related Discussions:- Cost comprise impact, Assignment Help, Ask Question on Cost comprise impact, Get Answer, Expert's Help, Cost comprise impact Discussions

Write discussion on Cost comprise impact
Your posts are moderated
Related Questions
The Work in Process account for Monty's Company contained the following entries: Work in Process Account Debit of $40,000 for direct raw materials Debit of $60,000 for direct labor


Hickory Company manufactures two products—14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is cons

Multi-collinearity Multiple regression analysis is based on the assumption that the independent variables are not correlated with each other, whenever the independent variables

Explain with examples five areas where linear programming can be applied in Managerial accounting

Find the value of the following: a.    If the total assets are Rs. 87,000 and the liabilities are Rs. 47,000, find out the amount of capital. b.    If the capital of propriet

If a company creates sales to a number of customers on credit terms this will have to wait for two or still three months before its debtors pay that they owe. It means that the deb

Markov Analysis It is a way of analyzing the current movement of some system in an effort to predict the future movement of the same system. There are two elements that must be

Western States Supply, Inc. (WSS), consists of three divisions—California, Northwest, and Southwest—that operate as if they were independent companies. Each division has its own sa

if equipment will be depreciated on a straight-line depreciation basis over a five year period with an estimated residual value, what do I do with this information in a investment