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Zero Based Budgeting
It is referred to also like priority based budgeting. It is a cost advantage approach budgeting where it is assumed that the cost allowance is Zero for any item till the manager responsible justifies its existence in terms of costs and benefits.
CIMA definition: it method of budgeting whereby all activities are re-evaluated each time the budget is set. It is concerned along with alternative implies that established activities have been compared along with alternative employs of the same resources.It takes away the implied right of existing activities to continue obtaining resources unless they can be implies to be the best employ of such resources.
Example of Batch Costing The budgeted variable overheads of a company for the year of 2001 are as given as: Department Overhead (shs.)
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Determine how much to stock 1. Employ The Economic Order Quantity Model This is an easiest model which helps the manager to find out the optimum quantity of stock to order
what are importance of cost classification
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