Variable costs are those costs that change with the changes in the quantity produced. On the other hand fixed costs are those costs that do not change (in the short run) regardless of increases or decreases in the level of production. These costs will still be incurred if there is no productivity…
The rent of a warehouse where these pencils are stored is $100; hence it is a fixed cost. $100 would still need to be paid whether 10 pencils are stored there or 1000 pencils. Thus with a change in production, the fixed costs remain unmoved.
Cost-Volume-Profit (CVP) analysis is a managerial accounting tool that helps to identify a relationship between the cost, profit and sales volume. It is used to 1) determine the level of output required to achieve any target profit level or 2) to find the impact changes in costs to the profitability. (Mowen & Hansen, 2005)
In CVP analysis, 'break even' means to produce goods at such a quantity where there is no-profit and no-loss. It is a position where the company incurs exactly the same amount that it generates from the sales. (Mowen & Hansen, 2005)
A direct cost is that cost that can be directly attributable to a specific unit of product or with a specific operation relating to production. On the other hand, an indirect cost is a fixed or overhead cost that does not relate to the production of a particular item and is incurred even when there is no output. (PHB, 2005)
The core activity of an accounting teaching class is to educate the students. Therefore all those items that directly relate to the educational process of accounting would be direct costs and those that do not relate to the educational process of accounting would be treated as indirect costs. The salary paid to the accounting teacher and the costs of accounting books will be direct costs since they directly relate to the teaching of the accounting course. The costs of lighting, electricity, janitorial services, etc. would be indirect costs since they just aid in the teaching process but are not directly related to teaching the course.
5. How can out-of-pocket costs and opportunity costs be applied to your personal financial decisions
Out of pocket costs and opportunity costs can be applied to an individual's personal financial decisions by comparing both of these costs. If the benefit of playing an hour of football is more that the benefit of studying for an hour, then the individual should use that hour to play football. If one hour is being spent each day at a tuition center which costs $50/hour for a 4 day week, it would cost $800 for a month using up 16 hours. If these 16 hours are used for other work like taking a horse riding lesson which is $400/month, then financially taking horse riding lesso ...
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These statements are published in the annual reports of public corporations. The data contained in the financial statements can be utilized by financial analyst to make financial analysis such as vertical, horizontal, and ratio analysis (Besley & Brigham, 2000).
This impact can be either positive or negative and in many cases both. Any major event will leave an indelible mark on the environment either directly or indirectly, and it is for this reason that methods to assess the environmental impact of events have been taken and new policies introduced to attempt to negate the harmful consequences.
Netflix is one of the American suppliers of no-demand media of internet streaming in UK, USA, Latin America, Canada, and the Caribbean. “Netflix, Inc. is an internet subscription service company, which provides subscription service streaming movies and TV episodes over the internet, and also sends DVDs by mail.
Another feature of the CVP is that it assumes that everything produced is sold (John Wiley & Sons, Inc., n.d.). The main feature of the CVP is that it analyzes the relationship among revenue, cost and volume and their effect on profit (Highered.mcgraw-hill.com, n.d.).
One of the major changes that were introduced by European Union in the year 2002 was the requirement to adopt International Accounting Standards (IAS) from January 2005 onwards. This initiative was taken by European commission. The initiative was taken to strengthen the capital market, by creating a common accounting standard for reporting.
I got an overall idea of what financial planning is about and what to expect out of it. It helped me take up an initiative to begin planning.
The worksheets helped me understand my family's spending pattern better. It also helped me assess my own preferences when it came to money matters.
d the notes to the financial statements, are prepared in accordance with the obligations that are put forward by the Companies Act 2006 and the regulations set by the International Accounting Standards.
There is immense importance of the auditor’s report with respect to the
These factors are the interests of stakeholders, and shareholder value maximization (Crane, 2008). For instance, the company has to carefully analyze the governance objective that it has to follow, that is, maximizing the values of the
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