Financial requirement of Business:
Financial requirement of a business might be for following reason:
A. For buying fixed assets:
For opening business, business requires fund for buying fixed assets such as machinery, land, plant and building. This prerequisite might be of 10-15 years.
B. For Advertising and Other Revenue expenditures:
At time, business needs money for advertising and other revenue expenditures. This will be medium term financial requirements.
C. Short term financial requirements:
Short term financial requirements are for fulfilling the working capital necessities. In this, we administer to get short term loan that will be repayable within 1 year.
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Activity Based Costing system is quite effective but it suffers from a number of limitations - Activity Based Costing is a complex system and needs lot of tedious and records calculations.
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Nature of Operating Costing - The major purpose of operating costing is to calculate the cost of the services that are offered by the organization.
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