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Steps in Strategic Cost Analysis 1) Recognize the suitable value chain and allocate costs and assets to it. 2) Identify the cost drivers of each value activity and how they int
Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,730 and two jobs in process: Job No. 429 $2,150, and Job No. 430
The Rohr Company’s old equipment for making subassemblies is worn out. The company is considering two courses of action: (a) Completely replacing the old equipment with new equipme
How do the different cost classifications can assist the management
The Simplex Method In the graphical solution the optimum solution is always associated with a corner (or extreme) point of the solution space. The simplex method is based funda
Improvement in product design may result in cost reduction illustrated below: 1) Material cost : change in design of the product may result in saving in material cost. Economi
Types of Costs In short run, costs can be of three general kinds: Fixed Cost: Total fixed costs stay constant as volume differs in the relevant range of production. Fixe
Steps involved in ratio analysis The following are the four steps involved in the ratio analysis: 1) selection of relevant data from the financial statement depending upon t
In the documentary bills the seller faces a lot of risk as the risk of non-acceptance or non-payment of goods. This poses a main risk for the seller. These additional securities in
The standard cost of chemical mixture ~ PQ’ is as follows: 40% of material P @ Rs. 400 per kg. 60% of material Q @ Rs. 600 per kg. A standard loss of 10% is normally anticipated in
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