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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.
JIT purchasing arrangements JIT philosophy also extends to adapting JIT purchasing techniques whereby delivery of material immediately precedes their use. By arranging with sup
What are the Objectives of budgetary control 1) Planning : planning is an important managerial function. it helps to decide in advance, what to do how to do it when to do it a
REGRESSION ANALYSIS A regression equation identifies an estimated relationship between a dependent variable (the cost) and one or more independent variables (the cost driver).
Q.Process of Pricing in maturity period? Maturing periods is the third stage in the life cycle of a product. If is a stage between growth period and decline period of sales. So
Cost comprise impact Some of the policy choices which tend to have the maximum impact on cost comprise: Product performance, configuration, and characteristics Mix and
What is a pro forma financial statement and how does it relate to the master budget?
5
Credit Limit A credit restriction is the maximum amount of credit that the firm will extend at a point of time. This indicates the extent of risk taken through the firm through
CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION) In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriat
Explain decision unit - zero base budgeting Decision units: an organization is divided among decision units. The manager of the decision unit justifies the relative budget
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