Simple Rate of Return Definition: The rate of return computed by dividing a project’s annual accounting net income by the initial investment required. Recommended Books ! Or Download E accounting book in MS-word format for just 20 $ - Click here to Download
Similarities Between Job Order and Process Costing System: Learning Objectives of this article: What are the differences and similarities in process costing and job order costing procedures. Similarities between job order costing and process costing systems can be summarized as follows. Both systems have
Shadow Prices: Definition and Explanation of Shadow Price: The determination of the optimum mix to maximize the contribution margin or to minimize cost assumes a defined set of constraints. It is useful to consider the sensitivity of the solution if a constraint is relaxed.
Setup Definition: Activities that must be performed whenever production is switched over from making one type of item to another.
Setting Standard Costs – Ideal and Practical Standards: Learning Objective of the Article: Who provide the inputs in setting standard costs? Define and explain ideal and practical standards. What is the difference between budgets and standards? What is the purpose of standard costing? Setting
Set Transfer Price at Market Price: Some form of the competitive marketed price (i.e., the price charged for an item on the open market) is often regarded as the best approach to the transfer pricing problem. Particularly if transfer prices negotiations routinely become bogged
Service Department Definition: A department that provides support or assistance to operating departments and that does not engage directly in production or in other operating activities of an organization.
Service Department Costing: After studying this chapter you should be able to: Difference between service department and operating department: Most of the large organizations have both operating departments and service departments. The central purpose of the organization are carried out in the operating department.
Selling and Administrative Expense Budget Definition: Selling and administrative budget is a detailed schedule of planned expenses that will be incurred in areas other than manufacturing during a budget period.
Selling and Administrative Expense Budget: Learning Objectives: Define and explain selling and administrative budget. Prepare selling and administrative budget. Definition and Explanation: Selling and administrative expense budget lists the budgeted expenses for areas other than manufacturing. In large organizations this budget would be a
Sell or Process Further Decision Definition: A decision as to whether a joint product should be sold at the split-off point or processed further and sold at a later time in a different form.
Self-Imposed Budget Definition: A method of preparing budgets in which managers prepare their own budgets. These budgets are then reviewed by the manager’s supervisor, and any issues are resolved by mutual agreement.
Selecting Allocation Base: Costs are ordinarily assigned to products and services by using a two stage process. In first stage, service department and other costs are allocated to operating departments. In second stage, the costs that have been assigned to operating departments are allocated
Segmented Financial Information on External Reports: The Financial Accounting Standards Board (FASB) now requires that companies in the united states include segmented financial and other data in their annual reports and that the segmented reports prepared for external users must use the same method
Segment Margin Definition: The amount computed by deducting the traceable fixed costs of a segment from the segment’s contribution margin. It represents the margin available after a segment has covered all of its own costs.
Segment Definition: Any part of an organization that can be evaluated independently of other parts and about which the manager seeks financial data. Examples include a product line, a sales territory, a division, or a department.
Second Stage Allocation Definition: The process by which activity rates are used to apply costs to products and customers in activity-based costing.
Screening Decision Definition: A decision as to whether a proposed investment meets some preset standard of acceptance or not.