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Rate of return or target pricing method
Under this method of price determination first of all a rate of return desired by the enterprises on the amount of profit capital invested by it is determined. The amount of profit desired by the enterprises is calculated on the basis of the rate of return. This rate of return amount of profit is added to the cost of production of the product and thus the price per unit of the product is determined. This method of price determination can be used by an enterprise to get a certain return on invested capital. The use of this method is possible only when there is no competition in the market.
define budget control system
Dynamic programming It is an extension which finds solutions to problems involving a number of decisions which have to be made sequentially. For example, the amount of a produc
The case of a fixed discount When evaluating inventory decisions when a fixed discount rate exists, the appropriate procedure is to compare the total costs of the EOQ with the
Mosman Ltd makes a single product. The projected sales for the first month of the coming year and the starting and ending inventory data are as follows: Sales 80,000 units Uni
Financial decisions are depends on specific considerations the major being the cash flows, liquidity and cost. Short-term working capital decisions or financial decisions are diffe
Steps of Graphic Analysis There are four steps in using graph paper to study cost-volume relationships: Step 1: Compute the scale which you will use: Volume is considered
7 feed from control to planning It is realized these days more than even before that management control is primarily a human activity which should focus on how to help individu
THE BASIC EOQ MODEL This is the most simple of all the models discussed. In addition to the general assumptions which relate to all deterministic models (i.e. certainty of all
EOQ mathematical model As costs of ordering and holding stock are equal at the EOQ point, we can build a simple mathematical model to solve the problem, as follows: (Q/ 2) X
what does it mean by improving materials usage in an organization?
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