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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.
Characteristics of cost reduction 1) Cost reduction must be real : said through increase in productivity change in product design improvement in technology etc. 2) Cost r
Objectives of the cost accounting The Objectives of the cost accounting are ascertain of costs, fixation of selling prices, proper recording and presentation of cost data to th
if equipment will be depreciated on a straight-line depreciation basis over a five year period with an estimated residual value, what do I do with this information in a investment
Battle of the Sexes game To understand Battle of the Sexes game, let’s consider a story as follows: Two players (a couple) wish to go to an event together but disagree about
Transfer Pricing Methods Transfer pricing methods are concerned with the alternative means by which a transfer price can be set and its impact on organizations gauged. Emmanuel
Describe the Limitations of management accounting: 1. Based on accounting information: the correctness and effectiveness of managerial decisions will depend upon the quality
Strategy A business characteristically invests considerable time and money in developing or creating its strategy. Employees, harried with day-to-day tasks, sometimes fail to s
Minimal Regret Criterion : This method seeks to minimize the maximum regret that would occur from choosing a particular strategy or alternative. The regret is the opportunit
MAKE OR BUY DECISIONS UNDER LIMITING FACTORS One reason for buying products/services from another organisation is the scarcity of resources, so that the company may be unable t
identify and explain the many classification of costs for planning, control.performance evaluation and decision making.
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