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The manufacturing division of an electronics company uses activity-based costing. The company has identified three activities and the related cost drivers for indirect production c
Limitations of abc analysis
Organization of Budgetary Control Budgetary control ideally includes the given steps as: 1. The creation of budget centres. 2. The introduction of sufficient
Accounts Payable or sundry creditors are generally unsecured debts owed through the firm. These are also considered to as payables on open accounts. They may not be evidenced throu
Methods of Work in Progress The two main methods used for purposes of valuing the opening work in progress: 1. Weighted Average Method 2. FIFO or First In First out Meth
Direct Material Usage Variance Refers to the difference among the actual quantity utilized and the standard quantity particular for the actual production, all valued at the st
Material Usage Variance (MUV): This is the variation between the actual quantity of material consumed and standard quantity which should have been consumed, expressed in terms
Occurrence of Overhead Variances Overhead variances arise mainly because of the conventions of the overheads absorption process. The overhead absorption rates employed in this
1. Single product or single mix of products 2. Variable cost, fixed cost and selling price are constant 3. The level of production will equal the level of sales Example:
ASSUMPTIONS OF BREAK EVEN ANALYSIS 1. Fixed costs for all time remain constant. 2. All costs are divided into fixed and variable costs. 3. Selling price will not alter de
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