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LIFE CYCLE COSTING Introduction Life cycle costing as its name implies costs the cost object i.e., product project etc. over its projected life. It is used to explain a s
Cost driver analysis Cost drivers are factors, which determine the costs of an activity i.e. a change in the cost driver will cause a change in the level of total cost relate
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Illustrate the concept of Cost The term cost indicates the amount of expenditure (actual or national) incurred on, or attributable to, a specified thing or thing or cost unit.
Select the cost driver(s): This might also be termed to as independent, explanatory or predictor variable. A cost driver can be stated as any factor whose change causes a chang
Review the roles of management accounting within a company. 1.What is the most important role of management accounting? 2.How is that different than financial accounting? 3.What is
Transition probabilities These are the probabilities of moving from one state to another in the next time period. Usually they are written in the form of a probability matrix.
Parameter prediction error: This is another aspect of faulty planning. As Hongren says, ‘planning decisions are based on predictions of future costs, future selling price, fut
Assigning Costs and Assets After identifying its value chain, a firm must assign operating activity and assets to value activities. Operating costs must be assigned to the act
BUDGETARY CONTROLS Control in a business is the process of guiding organization into viable patterns of activity in an environment. The main purpose of a control system is to m
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