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LEARNING CURVE THEORY The first time a new operation is performed both workers and operating procedures are untried but as the operation is replaced the workers becomes more fa
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
Independence of observations An important assumption for the simple linear regression model is the independence of errors. In many time series models, this assumption is violat
Firms need cash to invest in inventory, receivables and fixed assets and to create payments for operating expenses, so as to increase earnings and sales and make sure the smooth ru
Illustrate the concept of Cost The term cost indicates the amount of expenditure (actual or national) incurred on, or attributable to, a specified thing or thing or cost unit.
Advantages of zero base budgeting 1) it provides a basis for evaluating decision packages on the basis of benefit considerations 2) it reduces inefficiency and achieves high
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
In the current corporate world, this is a common practice of companies along with surplus cash to lend to another company for a short period generally ranging from 60 days to 180 d
Characteristics of cost reduction 1) Cost reduction must be real : said through increase in productivity change in product design improvement in technology etc. 2) Cost r
VALUE ADDED STATEMENTS Are intended to show how much wealth or value has been created by the company’s operations and how the wealth has been shared out to interested groups e.
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