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Determine the cost according to normality
According to normality: under this category cost may be categorized as follows:
Normal cost: it is the cost which is normally incurred at a given level of the output in the condition in which that level of the output is attained. It is charged to costing profit and loss account.
Abnormal cost: it is the cost which is not normally incurred at a given level of the output in the condition in which that level of the output is attained. It is charged to costing profit and loss account.
Prerequisites of a sound variances analysis system A variance analysis system would be good enough in controlling costs and evaluation performances if the following requirement
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Explain Solvency ratios The term solvency refers of the ability of a concern to meet its long term obligations. The long term indebtedness of a firm include debenture holders,
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