Stock-out costs, Managerial Accounting

Assignment Help:

Stock-out costs

These are the opportunity costs of running out of stock. They comprise:

1) The costs of lost customer sales, and therefore lost contribution to fixed costs.

2) Potential loss of goodwill with customers whose demand cannot be net.

3 Acquiring emergency supplies at higher prices to meet demand.

4) Cost production of finished goods, where raw material stock-outs occur.

The computation of safety stocks lingers on demand forecasts. The manager will have some notion (usually based on past experience) of the range of daily demand. That is the probability that exists for usage of various quantities.


Related Discussions:- Stock-out costs

Management, Discuss the different roles played by the qualitative and quant...

Discuss the different roles played by the qualitative and quantitative approaches to managerial decision making

Role of the management accountant, Define role of Management Accountant ...

Define role of Management Accountant The main role of management accountant is defined below. Planner e.g. budgeting Information provider e.g. operating statement

Major features of jit, Major features of JIT (1) Elimination of non-val...

Major features of JIT (1) Elimination of non-value added activity:   JIT manufacturing can be described as a philosophy of management, dedicate to the elimination of waste. Wa

Regression analysis, REGRESSION ANALYSIS A regression equation identifi...

REGRESSION ANALYSIS A regression equation identifies an estimated relationship between a dependent variable (the cost) and one or more independent variables (the cost driver).

Standard costing and budgetary control , STANDARD COSTING AND BUDGETARY CON...

STANDARD COSTING AND BUDGETARY CONTROL In practice, the terms standard cost and budgeted cost might be used interchangeably. Whereas it is possible to have budgeting without s

Incremental analysis, What nonfinancial factors should management consider ...

What nonfinancial factors should management consider in making its decision on whether to accept or reject a special order?

Explain the features of budgetary control, Explain the Features of budgetar...

Explain the Features of budgetary control From the definition the following features of budgets control emerge: 1) Establishment of budgets: budgets are prepared for each

Determine the need and importance of management accounting, Determine the N...

Determine the Need and importance of management accounting: 1.Increasing efficiency: management accounting increases efficiency of business operations. The targets of differe

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