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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).
Explain Kaizen costing It is a Japanese method used to manage cost during a product s planning and design stages and has been used by some Japanese firms for over twenty years
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accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;
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Quick ratio Meaning: this ratio establishes a relationship among quick assets and current liabilities Objective: the objective of commuting this ratio is to calculate th
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