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Explain the categories of The activity cost drivers The activity cost drivers can broadly be classified into following three categories: 1) Transaction drivers: for exampl
Illustration: ABC analysis Combine items on the basis of their relative value to form three categories—A, B and C. The data in the table below illustrates the ABC analysis.
First Cut Analysis of Costs The allocation of costs and assets will produce a value chain that illustrates graphically the distribution of a firm's costs. It can prove reveali
Optimum Solution From the stand point of implementing the LP solution, the mathematical classification of the variables as basic and non-basic is of no importance and should be
Carrying costs of inventory These are costs incurred because the firm has decided to maintain inventories. They generally consist of: • Stock-out costs • Insurance co
Implementation of ABC analysis The following steps are included in implementing the ABC analysis: 1. Categorize the items of inventories, establishing the expected use in un
Select Appropriate Alternative Courses of Action In practice, decision-making includes choosing among competing alternative courses of action and choosing the alternative which
Product life cycle Every product has a life cycle. The life cycle of a product vary from months to various years. For example in the case of cameras photocopying machines etc.
EOQ Model with quantity discounts Circumstances frequently occur where firms are able to obtain quantity discounts for large purchase orders. Buying in bulkiness has some merit
costs/per unit labor ... $ 4 materials ...5 fixed cost... $ 12 determine the break even point in units if the seeling price is $ 19 determine the break even point in sales at
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