Management Accounting
Economic Order Quantity (EOQ): Learning Objective: Definite and explain economic order quantity (EOQ). How is economic order quantity (EOQ) calculated? Definition of EOQ economic order quantity Formula (EOQ formula) Example: Definition and Explanation: Economic order quantity (EOQ) is that size of the order which gives maximum
Absorption Costing Definition Absorption costing is a costing method that includes all manufacturing costs – direct materials, direct labour, and both variable and fixed overhead – as part of the cost of a finished unit of product. This term is synonymous with full costing
E-Commerce Definition: The sales and marketing components of the e-business is called e-Commerce.
Ease of Adjustment Codes Definition: Costs are coded as Green, Yellow, or Red – depending on how easily the cost could be adjusted to changes in activity. “Green” costs adjust automatically to changes in activity without any action by managers. “Yellow” costs could be
Earnings Per Share (EPS) Ratio: Definition: Earnings per share ratio (EPS Ratio) is a small variation of return on equity capital ratio and is calculated by dividing the net profit after taxes and preference dividend by the total number of equity shares. Formula of
Debt to Equity Ratio: Definition: Debt-to-Equity ratio indicates the relationship between the external equities or outsiders funds and the internal equities or shareholders funds. It is also known as external internal equity ratio. It is determined to ascertain soundness of the long term financial
Capital and Revenue Items: Learning Objectives: Define explain and give examples capital and revenue expenditures, receipts, payments, profits and losses. What is the difference between capital and revenue expenditures? What are the exceptions to the general rule of capital and revenue expenditures? Difference between
Balance Sheet: Learning Objectives: Define and explain balance sheet. How is a balance sheet prepared? What are the objectives of preparing a balance sheet? Definition and Explanation: A balance sheet is a statement drawn up at the end of each trading period stating therein
Danger Level of Materials or Inventory Stock: Definition and Explanation: Some enterprise also calculate danger level. When this level of stock is reached, then emergency steps are taken by the management to acquire material supplies. When danger level is reached, the try is made
E-Business (Electronic Business) Definition: A comprehensive term describing the way an organization does its work by using electronic (internet based) linkages with its key constituencies in order to efficiently and effectively achieve its goals.
Absorption Costing Approach to Pricing: Learning Objective of the Article: Compute the selling price of a product using the absorption costing approach. What are the advantages or benefits, disadvantages/limitations of absorption costing approach The absorption costing approach to cost plus pricing differs from the
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History of Managerial Accounting: Managerial accounting has its roots in the industrial revolution of the 19th century. During this early period, most firms were tightly controlled by a few owner-managers who borrowed based on personal relationships and their personal assets. Since there were no external shareholders and
Need for Managerial Accounting Information: Learning objectives of this article: What is the need of managerial accounting in organizations and business firms? Every organization – large and small-has managers. Someone must be responsible for making plans, organizing resources, directing personnel, and controlling operations. Every where mangers carry out
What is Managerial Accounting: Learning objectives of this article: What is managerial accounting? What are functions of managerial accounting? Managerial accounting is concerned with providing information to managers that is, people inside an organization who direct and control its operation. In contrast, financial accounting is concerned
Introduction to Managerial Accounting: After studying this chapter you should be able to: Identify the major differences and similarities between financial and managerial accounting. Understand the role of management accountants in an organization. Understand the importance of upholding ethical standards. What is managerial accounting? Managerial accounting is concerned with
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