Define Cost Driver
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.
Direct Cost: The cost of resources directly used by an activity. The direct costs are assigned to actions by direct drawing of units of resources used by individual actions. A cost which is particularly recognized with a single cost o
What do you mean by the term Mission statements? Briefly describe it.
Activity: The real work task or step executed in generating and delivering products and services. The aggregation of actions executed within an organization which is helpful for the purpose of activity-based costing.
Accounts used in governmental accounting to record the budget amounts but not the actual amount. For example, at the beginning of the accounting period, the planned amount of tax revenue, revenue from license, and inflows from fines would be recorded as one amount in
Value-Added Activity: An activity which is judged to contribute to customer value or gratify an organizational requirement. The characteristic "value-added" reflects a belief that the activity can’t be removed without decreasing
Expenditure that increases the dollar amount of fixed assets on the balance sheet. These outlays either increase the value of assets already owned or add additional assets. The payments increase the future benefit of an asset by extending the life of the asset, increa
Estimated Cost: The procedure of projecting a future outcome in terms of cost, based on information accessible at the time. The estimated costs, instead of actual costs, are at times the basis for credits to work-in-process accounts a
Cash Management: Cash Management is the management of cash balances of a concern in such a way as to maximize the accessibility of cash not invested in inventories or fixed assets and to ignore the risk of insolvency. According to Keynes there are thr
Partnership deed: Partnership deed is a written agreement including the terms and conditions agreed by all the Partners.
Capital Budgets: The procedure of finding out which potential long-term projects are value undertaking, by comparing their estimated discounted cash flows with their internal rates of return. Capital Budget is the
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