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

Accounting concepts, implications of applying accounting concepts wrongly

implications of applying accounting concepts wrongly

What is long term budgets, what is Long term budgets Long term budgets...

what is Long term budgets Long term budgets: The budgets are prepared to depict long term planning of the business. The period of long term begets various between five to ten

Simulation models, SIMULATION MODELS Simulation is a method of analyzin...

SIMULATION MODELS Simulation is a method of analyzing a system by experimentally duplicating its behavior. Management accountants can be able to make meaningful inferences conc

Disadvantages of participatory budgets , Disadvantages of participatory bud...

Disadvantages of participatory budgets   They consume more time and therefore are more expensive The advantage of management participation may be negated by failure t

Determine the companys bid, King Manufacturing has four categories of overh...

King Manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are as follows: Maintenance

Analysis, Analysis Various business decisions have recurrent themes: wh...

Analysis Various business decisions have recurrent themes: whether to the outsource production or to the support functions, what level of production and pricing to establish, w

Line of credit, It is a commitment by a bank to lend a specific amount of f...

It is a commitment by a bank to lend a specific amount of funds on demand identifies the maximum amount of unsecured credit the bank will allow the customer to borrow at any time.

Analysis of each decision package , Analysis of Each Decision Package ...

Analysis of Each Decision Package This analytic procedure permits the manager of the decision package and its alternatives to assess and validate its operation. Numerous quest

Case study, Do you think the food industry in general has equivocated on fo...

Do you think the food industry in general has equivocated on food labeling? Are all foods labeled natural in the same way? Has modern society subverted the concept of nature?

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