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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.
Gardner Manufacturing Company produces a product that sells for $120. A selling commission of 10% of the selling price is paid on each unit sold. Variable manufacturing costs are $
Under this method, approximation is made of payments and cash receipts in the ensuring period. The dissimilarity of these payments and receipts indicates deficiency or surplus of c
Product life cycle Every product has a life cycle. The life cycle of a product vary from months to various years. For example in the case of cameras photocopying machines etc.
solution.
Bulk Agency Factoring : In this category factoring is essentially used as a method of financing book debts. In this sort of factoring the client continues to administer credit a
Comparing real and planned outcomes and responding to Divergences from Plan The final phases in the process outlined in figure shown below of comparing real and planned outcome
Once the cash budget has been arranged and suitable net cash flows established the finance manager must ensure that there does not exists an important deviation in between actual a
Risk seeking: A risk seeker is a decision maker who is concerned in the best likely outcome no matter how small the chance that they might take place i.e. he takes high risks
Assumption of break even analysis The break even analysis is based upon the following assumptions : 1) All elements of cost, i.e., production , administration and selling di
Explain the categories of The activity cost drivers The activity cost drivers can broadly be classified into following three categories: 1) Transaction drivers: for exampl
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