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Describe Committed fixed costs
Committed fixed costs are those fixed costs that arise from the possession of
1. Plant, building and equipment (for example, depreciation, rent, taxes, insurance premium etc.) or
2. A basic organization (for example salaries of staff). These costs remain unaffected by any short term changes in the volume of production. Any reduction in committed fixed costs under normal activities of the concern would have adverse on the concern’s long term objectives. Such costs cannot be controlled.
In this section we have discussed the motives for conducting cash balances. In addition, we have discussed cash deficit or surplus situation and how it can be contained by the use
distinguish between cost unit and cost centre
Yolande Tzar came to Northern Ireland from Poland five years ago to study at university. After graduating she worked as a sales manager for a local company and saved her wages to b
M/s ABC is seeing relaxing its collection efforts. At current its sales are as Rs.40 lakhs, the ACP is here 20 days and variable cost to sales ratio is .8 and bad debts are as .05
Prerequisites of a sound variances analysis system A variance analysis system would be good enough in controlling costs and evaluation performances if the following requirement
Disadvantages of ratio analysis 1) False results: ratios are based upon the financial statement. In case financial ratio is incorrect or the data upon which ratios are based
Learning and Spillovers The cost of a value activity can decline over time due to learning that increases its efficiency. The methods by which learning can lower cost over tim
Advantages and Limitations of Dynamic Programming Advantages: (1) In certain types of problems such as inventory control management, Chemical Engineering design, dynamic
The Ragan Corporation uses a process cost system. The company started March with 2,300 units in Work in Process-Dept. A. During the month 4,000 units were started. At the end of th
Return on Investment and Residual Income This is a traditional approach to performance measurement given by: ROI = Income Invested Capital (m
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