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Explain Activities uses through activities based costing
In order to correctly associate costs with products and services. ABC assigns cost to activities based on their use of resources. It then assign cost to cost objects such as products or customers based on their use of activities. ABC can track the flow of activities in organization through for core areas:
1) Cost object
2) Activities
3) Cost pool
4) Cost drivers
Examples
Learning and Spillovers The cost of a value activity can decline over time due to learning that increases its efficiency. The methods by which learning can lower cost over tim
distinguish between cost unit and cost centre
The least-cost method The process is described as follows: Assign as much as possible to the variable with the least unit cost in the whole tableau. (Ties are broken randomly).
ARR gives a fast estimate of a project's value over its useful life. ARR is derived by determining profits before taxes and interest. ARR is an accounting technique used fo
REGRESSION ANALYSIS A regression equation identifies an estimated relationship between a dependent variable (the cost) and one or more independent variables (the cost driver).
Q. Pricing over the life cycle of a product? The cycle begins with the invention of the new product. The innovation of a new product and its degeneration to a common product is
In 2007, the controller of the XYZ Company discovered that 2006 depreciation expense was overstated by $50,000, a material amount. Assuming an income tax rate of 40 percent, the pr
Multi-stage decision making under risk (The use of decision trees) Sequencing is concerned with the selection of an appropriate sequence or order of performing a series of jobs
Q. Show process of Pricing under decline stage? In this stage the producer should follow the pricing strategy which may fetch revenue not less than its cost of production. If h
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