1.0 Life cycle costing (LCC) 1.1 Definition Life cycle costing is a cost management approach which includes all costs and ensures that all those costs are managed over the life cycle of the product. Product life cycle begins from conception of the product until its abandonment which can be referred as ‘from cradle to grave‘. Product life cycle has four stages: 1) Product planning and initial concept design It involves process of identifying any underlying conditions‚ assumption‚ limitations and
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* Standard Costing Introduction Cost figures‚ in general‚ can be divided into two broad categories. They are Historical Costs and Standard Costs. Historical costs are available‚ after they are incurred. Such cost figures may have some value‚ once they are analysed. By analysis‚ the inefficiencies and deficiencies in production may be detected. However‚ the damage would have occurred‚ by the time the analysis under Historical costs is made. Analysis can be done only after the completion of the
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Activity-Based Costing Activity-Based Costing Activity based costing (ABC) is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity. Activity based costing is a subset of activity-based management. Activity based costing is used to determine product costs and for internal decision-making and for managing activities. Traditional Absorption costing is for external financial reporting. Activity-based costing is a suitable
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1a) Activity based costing is a relatively new type of procedure that can be used as an inventory valuation method. The technique was developed to provide more accurate product costs. This improved accuracy is accomplished by tracing costs to products through activities. In other words‚ costs are traced to activities (activity costing) and then these costs are traced‚ in a second stage‚ to the products that use the activities. Another way to express the idea is to say that activities consume resources
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Product Costing Module in ERP for L&T Kansbahal Works‚ Kansbhal‚ Orissa : A Case Study 1 Seema G. Bhol‚ 2Arun Mishra & 3Srikanta Patnaik Sambalpur University‚ Burla‚ Orissa‚ India‚ 2Head (IT Services)‚ L&T‚ Kansbhal‚ Orissa‚ India‚ 3 Department of Computer Science ITER ‚ SOA University ‚ Bhubaneswar‚ Orissa‚ India E-mail : guptaseema@hotmail.com‚ arun-kbl@kbl.ltindia.com‚ patnaik_srikanta@yahoo.co.in 1 Abstract - One need to be very accurate in what the products and services are costing. Inaccurate
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the following information for questions 1--10. Top That manufactures baseball-style hats. Material is introduced at the beginning of the process in the Cutting Department. Conversion costs are incurred (and allocated) uniformly throughout the process. As the cutting of material is completed‚ the pieces are immediately transferred to the Sewing Department. Data for the Cutting Department for the month of February 2005 follow: Work in process‚ January 31-- 50‚000 units 100% complete
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A Discussion on Activity-Based Costing ACC-532 Graduate Paper A Discussion on Activity-Based Costing When we think of cost of accounting it is easy to come up with numerous different cost accounting methods which is because over the year’s cost accounting has developed in numerous ways to accommodate different types of situations. While every type of cost accounting is important and has its own benefit and disadvantages this paper will focus on what I believe is one of the most important
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Defining‚ Modeling & Costing IT Services Integrating Service Level‚ Configuration & Financial Management Processes In our cost driven economy IT is facing increasing pressure to account for and reduce cost wherever possible. The old axiom “You must do more with less” has never had such an impact on IT operations and support as it does today. Thousands of IT managers are being placed in a situation which forces them to defend their staffing levels against both internal as well as external threats
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Chapter 7 Variable Costing: A Tool for Management Solutions to Questions 7-1 The basic difference between absorption and variable costing is due to the handling of fixed manufacturing overhead. Under absorption costing‚ fixed manufacturing overhead is treated as a product cost and hence is an asset until products are sold. Under variable costing‚ fixed manufacturing overhead is treated as a period cost and is charged in full against the current period’s income. 7-2 Selling and administrative expenses
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Activity based costing in manufacturing: two case studies on implementation The Authors Amrik S. Sohal‚ Department of Management‚ Monash University‚ Australia Walter W.C. Chung‚ Department of Manufacturing Engineering‚ Hong Kong Polytechnic University‚ Hong Kong Acknowledgements The authors are grateful to the Financial Controller at MelCo and to Mr Richard Siu‚ now Deputy General Manager of Ciba Specialty Chemicals (China) Ltd. They are also thankful to the Hong Kong Government Industry
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