organisation can cost a product and determine its price at any activity level The main costs and elements that a business needs to consider‚ taking into account the nature of these costs as well are: * Expense of buying vehicles or maintaining it * Mortgage * Business Rates * Wages Extra / Wages * Drawings * Advertising * Insurance * Loan repayment interest * Loan repayment capital * Purchases / VAT on purchases * VAT paid to C & E Variable costs are those
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- Costs can be divided into different concepts. Below I will explain those concepts and give an example of how it will work in practice. o Direct costs Direct costs are the costs that are directly linked to a cost object. You can also say‚ the costs that are made when making the product ready. All the costs of making the product ready for sale are the direct costs of the product. There will be only direct costs in a company when they making products‚ otherwise there are no direct costs. -
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2 explain the calculation of unit costs and make pricing decisions using relevant information Pricing is depend on the unit costs‚ consumer capability and the breakeven analysis‚ To perform the breakeven analysis and to calculate the unit cost ‚we should consider about the two relevant costs. Those are fixed costs and variable costs. Fixed costs – Costs that will not change with in a period of time . ex- Machineries‚ Insurance. These are the essential costs that should be considered at the beginning
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Report on the Reason of Why the Companies Should Implement ABC Rather than Traditional Cost System Report on the Reason of Why the Companies Should Implement ABC Rather than Traditional Cost System 1 Report on the Reason of Why the Companies Should Implement ABC Rather than Traditional Cost System Acknowledgement I would like to express my deepest appreciation to all those who provided me the possibility to complete this report. A special gratitude I give to‚ Ms. Tanzina Haque‚ Associate
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Average Variable Cost : 2002 $1‚011‚008** **$417‚004+$124‚101.20+$117‚903+$351‚000 2003 1‚142‚681.00** ** $520‚069+$171‚622.70+$79‚888+$371‚101 2004 1‚798.131.00 ** ** $915‚787.50+$320‚525.52 +$115‚999+$445‚819 Total $3‚951‚820.00 No.of Years 3 Average VC $1‚317‚273.00 Average Customers 8‚202.00 Average VC per unit $161.00 Fixed Cost $174
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distinct phases. Each phase is associated with different costs‚ profits and risks. Collectively‚ these phases are known as the Product Life Cycle (PLC) and are classified into: Introduction‚ Growth‚ Maturation‚ and Decline. The introduction phase is the first phase for all new businesses‚ products‚ and services. Any new idea‚ new business or service cannot escape this phase. Sales are generally extremely low and slow to takeoff. Marketing costs are required to create customer awareness‚ interest‚ and
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Variable costing vs Absorption costing Variable and Absorption costing are two different methods and ways that many organizations use to determine and calculate product cost. The income statements formats of both methods include period and product costs. However‚ each one has a different cost classification definition. Both have the same direct material and direct labor allocation‚ the differences is how they report the income‚ product‚ and pricing One of the main differences between
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Annual Report 2003 Year Ended March 31‚ 2003 Financial Highlights Sony Corporation and Consolidated Subsidiaries Year ended March 31 Yen in millions except per share amounts and number of employees Percent change Dollars in millions* except per share amounts 2002 2003 2003/2002 2003 FOR THE YEAR Sales and operating revenue Operating income Income before income taxes Income before cumulative effect of accounting changes Net income Per share data: Income before cumulative
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requirements‚ high switching costs‚ and closed distribution channels‚ their sustainable profitability is lower than Coca-Cola and Pepsi. The latter face almost no supplier power‚ few close substitutes as perceived by loyal customers‚ very high barriers to effective entry‚ low intensity of rivalry from concentrated markets‚ non-price tactics‚ and low cost-fixity with fast growing demand especially overseas. 2. MTV operates in a highly concentrated near-monopoly market where fixed costs are low and hence intensity
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Segmenting by Customer Coverage This type of strategic segmentation normally emerges from a trade-off study of marketing costs versus market coverage. There appears always to be a point of diminishing returns in the cost-versus-coverage relationship. The corporation’s task‚ therefore‚ is to optimize its range of market coverage‚ be it geographical or channel‚ so that its cost of marketing will be advantageous relative to the competition. Resegmenting the Market In a fiercely competitive market
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