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economies or diseconomies of scale the costs of a value activity are often subject to economies or diseconomies of scale economies of scale occur
cost behavior a firms cost position results from the cost behavior of its value activities the cost behavior is based on a number of structural
first cut analysis of costs the allocation of costs and assets will produce a value chain that illustrates graphically the distribution of a firms
assigning costs and assets after identifying its value chain a firm must assign operating activity and assets to value activities operating costs
cost analysis purposesfor purposes of cost analysis the desegregation of the generic value chain into individual value activities should reflect
the value chain and cost analysisthe behavior of a firms costs and its relative cost position stem from the value activities the firm performs in
cost advantage and value chain cost advantage is one of the two types of competitive advantage a firm may possess cost is also of vital significance
steps in strategic cost analysis1 recognize the suitable value chain and allocate costs and assets to it 2 identify the cost drivers of each value
management accounting influencea transfer pricing and performance measurement relies upon the judgment of the management accountant to make a
critique of performance measurementthis section brings together material from preceding data in this lesson in order to provide a critical appraisal
international transfer pricingtransfer pricing is a perennial issue within the international tax community richard casna accounting and business in
transfer pricing with third party consequencestransfer prices are used not only for internal record keeping and performance evaluation purposesthere
international transfer pricinginternational transfer pricing refers to the determination of prices to be charged between related persons and in
negotiated priceswhere market based prices are not applicable it has been argued that allowing managers to bargain with each other in order to
market valuethere is universal agreement that in competitive markets a market value based transfer price should achieve optimal results in this
absorption costabsorption or full cost systems transfer the full cost of the supplying department to the receiving department where a profit is to be
transfer pricing methodstransfer pricing methods are concerned with the alternative means by which a transfer price can be set and its impact on
advantages of transfer pricinga transfer pricing is similar to cost apportionment and allocation in that values of one department are passed to
transfer pricingtransfer pricing can contribute directly to the process of departmental performance measurement and indirectly to the measurement of
transfer pricing and performance evaluationtransfer pricing is simple in concept and yet complex in implementation it provides a divisional output
financial perspectivehow do we produce value for our shareholders this perspective covers traditional measures eg growth liability shareholder value
balanced score cardthis is a popular approach in current management thinking which consists of a variety of indicators both financial and
bench markingin the current business environment organizations are under a lot of pressure to improve performance and that of their divisions or
advantages of value added statements1 managers might be in a better position to control their organizations own inputs than the cost and usage
value added statementsare intended to show how much wealth or value has been created by the companyrsquos operations and how the wealth has been