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Vogel's Approximation Method (VAM) This method is a heuristic and usually provides a better starting solution than the two methods described above. However, VAM generally yield
Operating cycle considers to the average time lapse among the acquisition of raw material and the final cash realization. This notion is used to determine the needs of cash working
Explain Activities uses through activities based costing In order to correctly associate costs with products and services. ABC assigns cost to activities based on their use of
POINT ESTIMATE OF PROBABILITIES This approach requires a number of different values for each of the uncertain variables to be selected. These might be values that are reasonabl
The working capital needs of a firm are influenced by many factors. The important ones are as follows: Nature of business: The working capital necessity of a firm is closely l
based on your assumptions, calculate the cost per unit (total product cost on a per unit basis) under a traditional accounting system based on direct labor hours (table 1 prepared
Integer Programming It is a technique for solving a linear programming model with an added constraint that the decision variables must only be non-negative integers. In the
When the customers of the company are spread over broad geographical areas then in place of a particular collection centre the company opens collection centres at the regional stag
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
Participative Budgets In this approach to budgeting, budgets are developed by lower level managers who then submit them to their superiors. The budgets depend on the lower level
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