Also Read:Types of Costing Sunk costs are only incurred once, but the fixed costs are recurring. Take, for example, the case of a pharmaceutical company. The cost it incurred on R&D is a sunk cost irrespective of the fact that whether the formula it developed will be successful or not. ...
For example, the firm gets the benefit from the learning curve or experience curve with an increase in production. Also, due to optimum utilization of resources, wastages are minimized & hence raw material cost per unit decreases. Relationship between Fixed Costs and Economies of Scale The advant...
Cech[1] comments on glaciated terrain and the role of glaciers in deposited sedimentary layers of glacial material and in some cases material that contained groundwater. Paraphrasing: During glacial activity, (the most recent deglaciation began 15,000 years ago) underlying terrain was scraped, carved...
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In standard costing, how is the purchase price variance reclassified to arrive at actual cost? Is there a relationship between direct materials variances and direct labor variances? What is the materials usage variance? How is the material usage variance account reported on the financial statements?
and linking the design and manufacturing process to decrease product time-to-market. Activity-Based Costing links and supports the manufacturing process. It provides information to tailor business streams and material management, costs of activity and processes, value added versus non-value added analysi...
For example, the use of a higher grade of labour than was anticipated is likely to cause an adverse labour rate variance, a favourable labour efficiency variance, and possibly a favourable material usage variance (due to more experience of working with materials). ...
Article shared by: Capital market comprises the sources of long-term finance for industry and Government. It is the market that attracts savings from various sources and makes them available to the sectors of the economy requiring funds for productive uses. The savings and other funds are converte...
of costs related to the project, that is,labor costs, material costs, and overheads. Therefore, if the actual project costs are below the final costs, the contractor generates a profit. Similarly, the contractor makes a loss if the actual cost of the project is higher than the final cost....
If the copper price falls below that of the futures contract, the business may sell its contract at a loss. Even taking a loss on the futures contract, the company was able to mitigate its risk against a rise inraw materialcosts.