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STEPS OF DEVELOPING A COST ESTIMATING RELATIONSHIP Firmly speaking, a CER is not a quantitative method. It is a framework for using suitable quantitative methods to quantify a
ABC Analysis (Pareto Analysis) In ordinary parlance, ABC analysis can be best compared with our class society where the population is categorized into Top, Middle and Lower cla
Learning and Spillovers The cost of a value activity can decline over time due to learning that increases its efficiency. The methods by which learning can lower cost over tim
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
accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;
Determine the Profitability ratios in relation to investment a) Return on capital employed/ return on investment b) Return on equity or return on equity share holders' funds
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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
Accounts Payable Turnover Ratio is a short-term liquidity measure which is used to calculate the rate at which a company pays off its suppliers. Accounts payable turnover ratio is
Describe Committed fixed costs Committed fixed costs are those fixed costs that arise from the possession of 1. Plant, building and equipment (for example, depreciation, re
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