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Costing for the 21st Century
Finance & Accounting
Pages 3 (753 words)
Globalization,fluctuation, and competition influence the flow of businesses.These happenings could either bring a good effect or a bad effect to any industry.In the case of the manufacturing firms, they base their success on the profitability of the products
So that they may experience long-term profitability, careful planning and decision-making are necessary. The primary reason why people engage in business is to earn profit. Companies who have great knowledge in the mathematics of business are more likely to survive in the changing business environment (Foster, 2007). The management of businesses applies costing methods to help them make the right decisions. The use of cost, price, and volume analysis (CVP analysis) for the 21st century organizations is becoming an issue nowadays. Because the focus of CVP is to deeply understand the correlation of cost, quantity sold, and price, it enables the firm to gain knowledge on important financial data (Hansen, Mowen, & Guan, 2009). The application of cost, price, and volume analysis (CVP analysis) is a way to precisely assess the impact of the major decisions that the firm's management has made ("Cost/Volume/Profit Analysis”). The Notion of Value Costing for the 21st Century Organizations There are many complexities in today's method of accounting. Its essentiality to the entire business operation is the reason why the careful analysis of accounting is becoming crucial. ...
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