Operating cycle method, Managerial Accounting

Assignment Help:

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 working capital. Thus, the computation of total operating expenses, operating cycle period and number of operating cycles in the year is necessary for estimating the amount of working capital, as given below:

Operating Expenses: These expenses comprise purchase of raw materials, direct labour cost, fuel and power, selling and administrative and distribution expenses for a particular period for that estimates can be acquired from cost records. Depreciation, reject of intangible assets is not involved in these expenses as these are non-cash items. As the same, tax and dividend being appropriation of profits are also not included from these expenses. Capital expenses are also not incorporated in it. Though estimating the amount of these expenses fact as modifies in product mix, introduction of a new discontinuation or product of an old product must be created for the changes occurring in costs and price level due to internal and environmental factors.


Related Discussions:- Operating cycle method

Mr, i want to get the answer for exercises 2.1 and 2.2 on strategic and tac...

i want to get the answer for exercises 2.1 and 2.2 on strategic and tactical decisions

Investments carried as trading securities, a)    Does Ford report any inves...

a)    Does Ford report any investments carried as trading securities, available-for-sale securities, or held-to-maturity securities? If so, go over their significance to both the b

Integer programming, Integer Programming It is a technique for solving ...

Integer Programming It is a technique for solving a linear programming model with an added constraint that the decision variables must only be non-negative integers. In the

Budgetary styles, their definitions and the advantages and disadvantages

their definitions and the advantages and disadvantages

Complexities, major ways that these complexities might impact a business

major ways that these complexities might impact a business

Arrival rates-service rates-traffic intensity, Arrival Rates, Service Rates...

Arrival Rates, Service Rates, and Traffic Intensity The (average) arrival rate is the rate of arrival of customers at a queue, and is often denoted by x. If 10 customers arr

How much was Topaz’s operating income (income before taxes), How much was T...

How much was Topaz’s operating income (income before taxes) last year?

Variances analysis , Variances Analysis Variances are the differences ...

Variances Analysis Variances are the differences between actual results and expected results. Expected results are the standard costs and standard revenues. Price, rate and

Explain the shut down cost, Explain the Shut down cost A cost which wi...

Explain the Shut down cost A cost which will be still be required to be incurred even though a plant is closed or shut down for a temporary period. Ffor example the cost of

What are the resons to use variance analysis, What are the Resons to use Va...

What are the Resons to use Variance analysis Variance analysis should be a continuous process for following reasons: 1) Labor rates, salary levels etc, changes due to union

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd