Classification of costs with examples and
describe how costs can be classified giving examples in each classification. explain how the different cost classifications can assist management in decision making
Outputs: Any product or service formed from the consumption of resources. This can comprise information or paper work produced by the completion of the tasks of an activity.
A form of long-term debt that appears in the liabilities section of the balance sheet. A company sells bond as a way to borrow large amount of cash. The buyer pays for the bond and receives regular interest payment, annually or semiannually, for the duration of
Write a short note on the changing responsibilities of the management accountant?
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Give circumstances in which the fixed capital of partners might change. Answer: Two circumstances in which the fixed capital of Partners might change are as follows:
A plan for the cash coming into and going out of a business. Based on the sale forecast, the timing and amounts of cash receipts. Based on forecast of resources necessary to meet the sale forecast, management budgets the cash disbursements. This proc
Incremental Cost: The raise or reduction in total costs which would result from a decision to raise or reduce output level, to add a service or task, or to modify any part of operations. This information aids in making decisions such
Cost Allocation: This is a technique of assigning costs to activities, outputs, or other cost objects. The allocation base employed to assign a cost to objects is not essentially the cause of the cost. For illustration, assigning the
Cost Driver: Any factor which causes a modification in the cost of an action or output. For illustration, the quality of portions received by an activity, or the degree of complexity of tax returns to be evaluated by the IRS.
A financial analysis tools that measures the need for financing. The formula is the cash-flow from operating activities divided by the cash paid for long-term asset. Cash paid for long-term assets can be found on the statement of cash-flow, in the investing-activities
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