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Classification of ratio according to significance The ratios have also been classified according to their significance. Some ratios are more important than other and the fir
FLEXIBLE BUDGETING Flexible budget may be used in one of two ways: Planning and Control. At the planning stage when budgets are set, to reduce the effect of uncertainty. For ex
Explain Activities uses through activities based costing In order to correctly associate costs with products and services. ABC assigns cost to activities based on their use of
1. Paid $350,000 to purchase furniture and leased it to DEF Corp. for 5 years. DEF agreed to pay $89,955 on July 1 for each of the next 5 years. At the end of the lease term we ex
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
The president expects sales to increase by 12% next year. By how much should net operating income increase? Sales $2,000,000 Variable expenses 1,000
CHOOSING ORDER QUANTITY (SIZE—PROBLEM) The objective of inventory decisions is usually to minimize total inventory costs to the company. Costs are ascribed to all elements whic
The Ragan Corporation uses a process cost system. The company started March with 2,300 units in Work in Process-Dept. A. During the month 4,000 units were started. At the end of th
John Doe, MD A Business Simulation This simulation covers the transactions completed by John Doe, MD, a medical service business, which began on July 1 of the current year. Dr. D
Cost comprise impact Some of the policy choices which tend to have the maximum impact on cost comprise: Product performance, configuration, and characteristics Mix and
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