Management Accounting
Human Skills Definition: Human skills involve the ability to work well with other people both individually and in group. Because managers deal directly with people, this skill is crucial! Managers with good human skills are able to get the best out of their people.
Designing and Implementing Activity Based Costing (ABC) System: Experts agree on several essential characteristics of any successful implementation of activity based costing system. First, the initiative to implement activity based costing must be strongly supported by top management. Second, the design and implementation of
Activity-based costing (ABC) Definition A costing method based on activities that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore fixed costs.
Factory Overhead Idle Capacity Variance: Learning Objective of the article: Define and explain factory overhead idle capacity variance. How is FOH idle capacity variance calculated? What are the reasons of unfavorable idle capacity variance Definition and Explanation: Factory overhead idle capacity variance is the
Activity Based Costing (ABC) System and Top Management Learning Objectives: Understand the importance of the support of top management in the implementation of activity based costing system. Experts agree on several essential characteristics of any successful implementation of activity based costing. First, the initiative
Impact of Just In Time (JIT) Inventory Methods on Variable and Absorption Costing System: Learning Objectives: Why net operating income figure under variable costing and absorption costing systems are almost same when companies use just in time manufacturing and inventory control system? Variable costing
Human Factors in Budgeting: The success of a budget program also depends on: The degree to which top management accepts the budget program as a vital part of the company’s activities. The way in which top management uses budgeted data. If a budget program
Ideal Standards Definition: Standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times.
Treatment of Costs Under Activity Based Costing (ABC) System Learning Objectives: How manufacturing, non-manufacturing and idol capacity costs are treated under activity based costing system? Contents: Non-manufacturing costs and activity based costing Manufacturing costs and activity based costing Costs of idle capacity and activity
How a Bill of Exchange Functions: In order to fully grasp the transactions relating to bill of exchange we thoroughly learn the procedure. The following example will make it clear. Suppose A sells goods to the value of $500 to B. The most ready
Cost of Capital Definition: The overall cost to an organization of obtaining investment funds, including the cost of both debt sources and equity sources.
Cost of Acquiring Materials | Materials Acquisition Cost: A guiding principle in accounting for the cost of materials is that all costs incurred in entering a unit of materials into factory production should be included. Acquisition costs, such as the vendor’s invoice price and
Ideal Standards Definition: Standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times.
Cost Object Definition: A cost object is anything for which cost data are desired. Examples of possible cost objects are products, product lines, customers, jobs, and organizational subunits such as departments or divisions of a company.
Horizontal/Trend Analysis Definition: A side-by-side comparison of two or more years’ financial statements. Click here to read full article about horizontal or trend analysis. Relevant terms: Vertical Analysis
Hindrances/Problems to Proper Cost Assignment in Segmented Reporting: For segment reporting to accomplish its intended purposes, costs must be properly assigned to segments. If the purpose is to determine the profits being generated by particular segment or division, then all of the costs attributable
Cost Driver Definition: Cost driver is a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.
High-Low Point Method Definition: A method of separating a mixed cost into its fixed and variable elements by analyzing the change in cost between the high and low levels of activity.