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
importance of ratio analysis


Can someone do my case study for managerial accounting including writing a sales report?

Final paper: CAPM and Capital Structure (2500 words max) Reflect on the course materials with specific focus on the last two papers (Sharpe; Modigliani & Miller). Synthesize the k

Calculate the EOQ An agent supplies 1000 units per calendar month (PCM) OF A PRODUCT TO CONSUMER. The cost per unit is £175 and the amount cost of storage space is £40. Associ

RELEVANT COSTS FOR NON-ROUTINE DECISIONS A relevant cost is a cost that is appropriate to a specific management decision. To be relevant, a cost should be: 1) Future cost

State the price determination under the market condition The price determination under the following market condition is as follows: 1) Pure competition: in this situation

Participative Budgets In this approach to budgeting, budgets are developed by lower level managers who then submit them to their superiors. The budgets depend on the lower level

Application of Information technology in respect of management information system

Accounting Profit is a company's sum total earnings, computed according to Generally Accepted Accounting Principles (GAAP), and involves the explicit costs of operating business, l