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Lock Box System: In this type of system, the customers are advised to mail their payments to a post office box hired through the firm for collection purposes near their region. The payments are collected through local banks that are authorized to do similar. They credit the payments rapidly and report the transaction to the head office.
Zero Balance Account: In this account any excess cash is utilized to buy marketable securities. Surplus cash is the balance remaining after the cheques presented against this account are cleared. Under the case of shortage of cash marketable securities are sold to replenish cash.
Question: A friend of yours is revising for his examination in management accounting and needs some help from you. He asks you the following questions. Write brief notes on eac
State the steps for Standard costing system standard costing system involves the following steps 1) Setting-up of standards for each element of cost: standards should be s
1. If the marginal cost of producing a good is increasing as a firm produces more of the good, then which of the following must be true? a. AFC is rising b. AVC i
a annual sales are 585000 unit. the purchase price per unit is $2. the carrying cost is 26% of purchase price of goods safty stock is 100000 units on hand two weeks are required fo
QUEUING THEORY When limited facilities fail/delays to satisfy demands made upon them, problems occur which generate queues or waiting lines. Illustrations are: • Customers
EOQ Model with quantity discounts Circumstances frequently occur where firms are able to obtain quantity discounts for large purchase orders. Buying in bulkiness has some merit
Applications of Markov Chains They are a particular class of probabilistic models and their applications include analysis of: Inventory systems Replacement and mainten
Use of Budgetary controls Budgetary controls are used for the following reasons: 1) To state the objectives of the organization as a whole. 2) To reveal the extent by whi
A cash budget is one of the main important devices to plan and control cash payments and receipts. In preparation of a cash budget the subsequent points are considered. Cred
Illustration of short-term decisions These are, to a significant extent, determined by the excellence of the firm's long-term decisions. Illustration of short-term decisions in
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