Evaluation of Transfer Pricing Policies
Introduction When one department of company manufactures some product which is supplied to another department of the company, transfer pricing
Read moreCost Accounting
Cost accounting is a process of recording, classifying, analyzing, summarizing allocating and evaluating various alternative courses of action and control of costs. Its goal is to advise the management on the most appropriate course of action based on the cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future.
Since managers are making decisions only for their own organization, there is no need for the information to be comparable to similar information from other organizations. Instead, information must be relevant for a particular environment. Cost accounting information is commonly used in financial accounting information, but its primary function is for use by managers to facilitate making decisions.
Coffee Maker’s Incorporated (CMI) – Transfer Pricing Example
Coffee Maker’s Incorporated (CMI) Two divisions of a CMI are involved in a dispute. Division A purchases Part 101 and
Read moreWhat is Process Value Analysis
Process Value Analysis Process value analysis (PVA) is a technique that managers use to identify and link all the activities
Read moreWhat is Segment Contribution Margin
A segment contribution margin is a segment’s sales revenue minus its direct costs (direct variable costs and direct fixed costs
Read moreIs gross margin and contribution margin same
No; gross margin is not the same as contribution margin. Contribution margin is the difference between total revenues (TR) and total
Read moreHow to compute unit costs
Unit costs are computed by dividing some amount of total costs (the numerator) by the related number of units (the denominator).
Read moreCost Object – Definition
A cost object is anything for which a separate measurement of costs is desired. Examples include a product, a service,
Read moreACC 203 Quiz Part II
____Willy has fixed costs of $30,000. The price of their product is $10 and the variable costs = $4 per
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Accounting in Tourism and Hospitality Organisations
Compare and contrast financial and management accounting practices deployed within tourism and hospitality organisations To begin with, management accounting helps
Read moreRelevant Costs – Meaning and Pitfalls
Relevant costs are those expected future costs which vary under various alternatives. Let’s take an example, in the case of
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