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Accounting Profit is a company's sum total earnings, computed according to Generally Accepted Accounting Principles (GAAP), and involves the explicit costs of operating business, like interest, depreciation and taxes.
Accounting profits tend to be more than economic profits as they skip some implicit costs, like opportunity costs. For instance, if you invest $100,000 to establish a business and gained $120,000 in profit then your accounting profit would be $20,000. Economic profit would put in implicit costs; like the opportunity cost of $50,000 should you have been employed in its place during that particular period. As shown by this, you would have an economic loss of $30,000 i.e. $120,000 - $100,000 - $50,000).
Computing equivalents units and assigning costs to completed units and ending work in process; no beginning inventory or cost transferred in (30 -45min) Sue Electronics makes CD
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After going through this section, you must be capable to: Know the need for establishing sound credit policy; Identify the different credit policy variables; Know the cred
What is period cost Period costs are those costs which are reported as expanses of the period in question. These are cost which are not assigned to the product but are charged
advantage and disadvantage of incremental budget
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Determine Cost pool and Cost drivers Cost pool: it is another name given to a cost centre and, therefore an activity cost centre may also be termed as an activity cost pool.
definition and illustrations
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Cash is a significant current asset for the operations of business. Cash is the fundamental input that maintains business running smoothly and continuously. In excess of cash and l
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