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Implementation of ABC analysis
The following steps are included in implementing the ABC analysis:
1. Categorize the items of inventories, establishing the expected use in units and price per unit for each item.
2. Establish the total value of each item by multiplying the predictable units by its unit price.
3. Rank the item in accordance with the net value, providing first rank to the item with highest total value and so forth.
4. Calculate the ratios (percentage) of number of units of each item to net units of all items and the ratio of net value of each item net value of all items.
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Advantage of relevant cost
State overhead expenses It is to be noted that the term overheard has a wider meaning than the term indirect expanses. Overheads include the cost of the indirect material and
static budget
EMERALD LTD is planning an expansion programme,which will require Rs 30 crores & can be funded through one of the following 1.issue further equity share of Rs 100 each at par.
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