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Account analysis (Inspection of accounts) method:
This method requires that departmental managers and the accountant inspect each item of expenditure within the accounts for some output level and then classify each of these items as wholly fixed, wholly variable or mixed.
A single average unit cost figure is selected for the items categorized as variable whereas a single total cost for the period is used for the items categorized as fixed.
Mixed costs are decomposed into their variable and fixed components.High low method (Two point method):
Under this method, records of costs in the previous period are reviewed and the costs of 2 periods are selected. These are the period with the highest level of outputs and the period with the lowest output. A line passing through these two points is then established and used in estimating costs.
Organizing (1) It is the establishment of the framework within which the required activities are to be performed and the designation of who should perform such activities. It inc
State overhead expenses It is to be noted that the term overheard has a wider meaning than the term indirect expanses. Overheads include the cost of the indirect material and
Procedure of material acquisition A stores record is maintained into which the quantity and value of materials received is entered. Issues of materials to production are made b
Application of zero base budgeting In the following areas ZBB may be applied: 1) redundant schemes may be discontinued 2) identify the duplicate schemes and merge them in
What is cvp?
Explain in Details Return on INVESTMENTS
Viti Ltd, located in southern Viti Levu, manufactures a variety of industrial valves and pipe fittings that are sold to customers in the eastern states. Currently, the company is o
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What is the Responsibility of operating budget when the operating budget of a firm is constructed in terms of responsibility areas it is called the responsibility budget shows
Directing There are number of good plans which are never realized. To realize a plan it requires the initiation and direction of the number of actions. Often, thes
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