LIFE CYCLE COSTING Life cycle costing (LCC) is the process of collecting‚ interpreting and analyzing data and using quantitative tools and techniques to predict the future resources that will be required in any life cycle of a system of interest. LCC can also be defined as a technique to establish the total cost of ownership. It is a structured approach addresses all the elements of this cost and can used to produce a spend profile of a product over its life span. The result of LCC usually
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RINGKASAN ARTIKEL “The Effect of Strategy and Organizational Structure on The Adoption And Implementation of Activity-Based Costing” by Maurice Gosselin I. Masalah Penelitian Permasalahan utama dalam penelitian ini adalah adanya fenomena ABC Paradox. Beberapa waktu yang lalu banyak akuntan manajemen dan para akademisi yang menunjukkan bahwa Activity-Based Costing (ABC) merupakan suatu metode perhitungan biaya yang paling efektif atau baik untuk digunakan. Namun‚ survei penelitian yang terdahulu
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profits reported under variable and absorption costing differ? How can we reconcile the profits reported under the two approaches? Profits reported under variable and absorption costing will differ when inventory increases or decreases during the year. The difference involves the timing with which fixed manufacturing overhead becomes an expense. Under variable costing‚ fixed overhead is expensed immediately as it is incurred. Under absorption costing‚ fixed overhead is inventoried until the manufactured
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COST AND MANAGEMENT ACCOUNTING Target Costing at Toyota Akriti Kapoor 11PGDM003 Section A Introduction There are numerous differences between management practices in Western companies and companies in Japan. One of the main differences is related to cost reduction. A manager in Europe or the United States generally expects to use cost information to make decisions about pricing and investments‚ while a Japanese manager expects to use cost information to control costs. Toyota uses cost
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Marginal Costing is ascertainment of the marginal cost which varies directly with the volume of production by differentiating between fixed costs and variable costs andfinally ascertaining its effect on profit. The basic assumptions made by marginal costing are following: - Total variable cost is directly proportion to the level of activity. However‚ variable cost per unit remains constant at all the levels of activities. - Per unit selling price remains constant at all levels of activities. - All
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between ABC Costing and the Time Driven ABC Costing Activity Based Costing (ABC)‚ is a method used to gather an estimation of the cost of a product or service. It was proposed by Robert S. Kaplan and W. Bruns. It helps to assign costs to products and services‚ of an activity along with the resources‚ based on the consumption that takes place by each product or service. The model helps companies in deciding that which products are not rightly priced and which products are actually costing more or are
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Variable costing and absorption costing are the two most commonly used methods of inventory costing for manufacturing companies. The inventory method of variable costing takes place when total direct and indirect variable manufacturing costs are included within inventoriable costs. Fixed manufacturing costs however‚ are considered costs of the period under variable costing. The next method of inventory costing‚ absorption costing‚ includes all variable manufacturing costs as well as fixed manufacturing
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Absorption and Variable Costing‚ Inventory Management Absorption and Variable costing are very important tools for cost accounting. Both of these costing methods allow you to see the cost of your inventory‚ in a different way. For example the absorption method allows you to assign all costs to the product‚ while variable costing allows only variable costs to be assigned to the product. Inventory management is extremely important as well because it ties into efficiency and lowering your costs
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http://www.writework.com/essay/issues-product-costing-unimportant-virtual-organisations-o Issues of product costing are unimportant for virtual organisations that outsource production operations." Essay by hotsanjaysoni‚ B-‚ March 2005 The topic states that is product costing important for virtual organisations that are outsourcing their production operations. Virtual organisations are those corporation that operate in the world of e-business or e-commerce. A virtual organisation can be defined
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1. What are the strengths and weaknesses of the target costing system? Strengths: ● Target cost system is ideal for assembly-oriented industries with great involvement in the diversification of product lines‚ usage of technologies of factory automation‚ development of systems for reducing cost during all the stages of product’s life cycle such as is the case of Nissan Motor 1 . ● Since Nissan cost system is continuously undergoing modification and improving processes to ensure high productivity
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