Cost comprise impact, Managerial Accounting

Assignment Help:

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.


Related Discussions:- Cost comprise impact

Determine the price determination process, Determine the Price determinatio...

Determine the Price determination process 1) Estimating the demand for the product: the first step in determining the price of a new product is to estimation the anticipated

Eoq mathematical model, EOQ mathematical model As costs of ordering and...

EOQ mathematical model As costs of ordering and holding stock are equal at the EOQ point, we can build a simple mathematical model to solve the problem, as follows: (Q/ 2) X

Determine cost pool and cost drivers, Determine Cost pool and Cost drivers ...

Determine Cost pool and Cost drivers Cost pool: it is another name given to a cost centre and,  therefore an activity cost centre may also be termed as an activity cost pool.

Standard costing .., the applicability of standard costing in modern manufa...

the applicability of standard costing in modern manufacturing environments in volatile environments

Strategic plan, How to write introduction on strategy plan

How to write introduction on strategy plan

Explain the external factors of pricing decisions, Explain the External fac...

Explain the External factors of pricing decisions 1) Demand: the market demand for a product or service obviously has big impact on pricing. Since demand is affected by fact

What are the advantages of zero base budgeting, Advantages of zero base bud...

Advantages of zero base budgeting 1) it provides a basis for evaluating decision packages on the basis of benefit considerations 2) it reduces inefficiency and achieves high

FIFO, I WANT TO KNOW THE RULES FOR DOING LIFO AND FIFO

I WANT TO KNOW THE RULES FOR DOING LIFO AND FIFO

Process of pricing in maturity period, Q.Process of Pricing in maturity per...

Q.Process of Pricing in maturity period? Maturing periods is the third stage in the life cycle of a product. If is a stage between growth period and decline period of sales. So

What are the characteristics of product life cycle, Characteristics of prod...

Characteristics of product life cycle The major characteristics of life-cycle concept are as follows: 1) The products have finite live and pass by the cycle of development i

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd