Cost reduction Generally defined as the act of cutting costs to improve profitability. Cost reduction‚ should therefore‚ not be confused with cost saving and cost control. Cost saving could be a temporary affair and may be at the cost of quality. Cost reduction implies the retention of essential characteristics and quality of the product and thus it must be confined to permanent and genuine savings in the costs of manufacture‚ administration‚ distribution and selling‚ brought about by elimination
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We already know that following are the important cost concepts related to the production process of a firm: • Fixed Cost • Varibale Cost • Average Cost • Marginal Cost please refer to following page Introduction to Cost Concepts to understand various cost concepts in detail. Here we will briefly state again the meaning of above stated cost concepts for better understanding of the module on short run cost analysis. Fixed Cost is that cost which does not change (that is either goes up or
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The fixed asset register is an accounting method used by businesses to identify the major resources they hold. Lindsey Lester explains what it is and how it should be used The reporting of fixed assets should comply with Financial Reporting Standard 15 (FRS 15). The aim of this reporting standard is to ensure that tangible fixed assets are accounted for on a consistent basis. It sets out the principles in making a decision as to whether a tangible fixed asset is stated at cost on a financial statement
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3.2 Size of business 3.2.1 Pay Per Click Advertising It is vital for these commercial websites rank highly in search engine result pages because these provide the main entry point to paying customers. Therefore‚ many businesses turn to using Pay Per Click advertising to achieve high rankings. Pay Per Click is paid advertising‚ so it needs financial investment. Just like all the investment is companied with risk‚ for Pay Per Click‚ if marketing budgets are applied in the wrong area‚ this could lead
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Behavioral Costing British Aerospace case study A. Introduction When we think about the cost of an aircraft‚ we tend to think of the cost of buying the product rather than the costs of running it! British Aerospace’s service to the customer does not stop at the aircraft acquisition stage‚ when the airplane is sold to the customer. If anything‚ this is when the customer relationship begins. This case study focuses upon the processes involved in behavioral costing aircraft components. Given
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as men’s sports. Women sports are newer and hence the reason for them not getting the recognition they deserve. But the sports world is starting to see how women’s sports can be just as interesting and exciting as men’s sports can be. I am going to show you some discrepancies between women and men’s sports. Women and men’s sports should each have equal opportunities. I come from a small little town called Schuylerville but sports were still very important at my school. I was always a big
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most from activity-based costing are those where overhead costs are a _________ percentage of total product cost and where there is ___________ diversity among the various products that they produce. A) low‚ little B) low‚ considerable C) high‚ little D) high‚ considerable 17. Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level‚ batch-level‚ product-level‚ or organization-sustaining
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Advertisements are too misleading nowadays. What is your view? Advertisements can take different forms such as television‚ radio‚ display lights‚ newspapers‚ adverts or magazine adverts‚ leaflets‚ posters/billboards‚ sides of bags/vehicles‚ direct mail‚ internet and cinema. Advertising can either be informative or persuasive. It is true that businesses do spend a lot of money to advertise their products in order to boost their sales and thus their profit; in other words for their own purpose. They
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revenue by * increasing production (To increase revenue‚ firms look to increase price or quantity‚ as price multiplied by quantity equals total revenue. Purely competitive firms can sell as much as they want at the market price. Adding additional units of the product does not result in a change in the market price. Therefore‚ since purely competitive firms do not influence price‚ they increase total revenue by increasing quantity). 2. What are two ways for a competitive firm to
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Cost allocation for indirect costs Cost Pool – Set of costs that are added together before being allocated to cost objects on some common basis Cost Driver/ Allocation base Cost Object Cost Driver Rate = Total Costs in Pool/ Total Quantity of Driver Where total quantity of driver = practical capacity of driver Cost of excess capacity = Cost Driver Rate * Excess capacity Predetermined overhead rate - cost per unit of the allocation base used to charge overhead to products. Predetermined
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