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Identification of decision packages - Zero base budgeting Each manager should break down his decision unit into smaller decision packages. Top manager may lay down the minimum
Stellar Packaging Products and its primary customer, Estrella Coffee, are deciding on appropriate costing systems for their operations. Stellar Packaging Products’ manufacturing is
briefly discuss five characteristics of relevant cost
RELEVANT COSTS FOR NON-ROUTINE DECISIONS A relevant cost is a cost that is appropriate to a specific management decision. To be relevant, a cost should be: 1) Future cost
Maximum change in marginal Profit or Cost Just as we did in studying the permissible ranges for changes in resources, we are also interested in studying the permissible ranges
if equipment will be depreciated on a straight-line depreciation basis over a five year period with an estimated residual value, what do I do with this information in a investment
Explain Profitability ratios in relation to sales a) Gross profit ratio b) Net profit ratio c) Operating ratio d) Operating profit ratio e) Expenses ratio
Disadvantages of zero base budgeting 1) It is not suitable for all the activities in an organization 2) It has limited application in a profit making organization. In this c
Operating Cycle Method In this way, total operating expenses for a period are divided via the number of operating cycles in the relevant period to compute the cash need for wor
Participative Budgets In this approach to budgeting, budgets are developed by lower level managers who then submit them to their superiors. The budgets depend on the lower level
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