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Profitability ratios The primary objective of a business under taking is to earn profits. Profit earning is considered necessary for the survival of the business. A business re
Describe the Nature of standard costing The system of standard costs (standard costing) is a management technique of using predetermined costs (standard costs) for evaluating p
ABC Analysis (Pareto Analysis) In ordinary parlance, ABC analysis can be best compared with our class society where the population is categorized into Top, Middle and Lower cla
Advantages of Imposed budgets Advantages: They increase the probability that the organization strategic plans are incorporated into the planned activities. They
Directing There are number of good plans which are never realized. To realize a plan it requires the initiation and direction of the number of actions. Often, thes
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
Cost Behavior A firm's cost position results from the cost behavior of its value activities. The cost behavior is based on a number of structural factors which influence cost
VALUE ADDED STATEMENTS Are intended to show how much wealth or value has been created by the company’s operations and how the wealth has been shared out to interested groups e.
Categories of zero base budgeting The preceding discussion will reveal that zero base budgeting is based primarily on: 1) Development of decision units 2) Identification
accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;
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