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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.
Use of Computer Systems in Linear Programming When a computer is to be used for linear programming there are a number of steps: (1) Development of the equations which descri
State the Opportunity cost The net selling price, rental value or transfer value which could be obtained at a point in time if a particular asset or group of the assets were to
what are characteristics of relevant cost?
1)Prepare a three (3) year forecast of estimated future cash flows for you company and give valid economic/business reasons for your projections. This means you will have a stateme
What is Standard costing Standard cost is a predetermined cost. It is a determination in advance of production of what should be the cost. When standard costs are used for the
Calculation
Traditional budgeting vs. zero base budgeting 1) Traditional budgeting is accounting oriented. Main stress happens to be on previous level of expenditure. Zero base budgeting m
Cost Advantage and Value Chain Cost advantage is one of the two types of competitive advantage a firm may possess. Cost is also of vital significance to differentiation strate
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
Game Theory Game theory was developed for the purpose of analyzing competitive situation involving conflicting interests. In game theory, there are assumed to be two or more pe
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