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Contribution margin Analysis Contribution Contribution is the difference between sales and variable cost or marginal cost of sales . if may also be defined as the excess
Types of games Four basic ways in which competitive situations (or games) can be classified are: (a) Number of Competitors: In game theory a competitor is characteriz
Viti Ltd, located in southern Viti Levu, manufactures a variety of industrial valves and pipe fittings that are sold to customers in the eastern states. Currently, the company is o
Assumptions for relevant costs The key assumptions made in relevant costing are: The cost behavior is recognized. The amount of fixed costs, unit variable costs, selli
Advantages of kaizen costing 1) Record individual tasks 2) Instantly replay observation 3) Select and use best practice 4) Categorize activities using kaizen terminolo
Improvement in product design may result in cost reduction illustrated below: 1) Material cost : change in design of the product may result in saving in material cost. Economi
Determine the Traditional classification a) Balance sheet or position statement ratios: balances sheet ratios deal with the relationship among two balance sheet item e.g., th
Disadvantages of ratio analysis 1) False results: ratios are based upon the financial statement. In case financial ratio is incorrect or the data upon which ratios are based
Correlation coefficient (r) Correlation coefficient measures the degree of association between two variables such as the cost and the activity level. r = nΣxy - Σx Σy
Disadvantages of the cost accounting: 1. It is unnecessary: it is argued that maintenance of the cost records is not necessary and involves duplication of work. It is based o
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