Internal Failure Cost Definition
Shamsa Rafique Internal Failure Cost Definition: Internal failure costs are those costs that are incurred as a result of identifying defective products before they are shipped to customers.
Cost Volume Profit (CVP) Relationship in Graphic Form
Abida Rehman Cost Volume Profit (CVP) Relationship in Graphic Form: Learning Objectives: Prepare a CVP graph or breakeven chart. The relationships among revenue, cost, profit and volume can be expressed graphically by…
Debt Service Ratio or Interest Coverage Ratio
Debt Service Ratio or Interest Coverage Ratio: Definition: Interest coverage ratio is also known as debt service ratio or debt service coverage ratio. This ratio relates the fixed interest charges…
Job Order Costing Questions and Answers
Sana Ahmed Job Order Costing Questions and Answers: Questions: Cost accounting is said to consist of three different phases. Name them. See answer. Name four control accounts concerned primarily with cost determination.…
Cost Volume Profit (CVP) Formulas
Cost Volume Profit (CVP) Formulas: Contribution margin = Sales - Variable expenses (manufacturing and non-manufacturing) Net operating income = Contribution margin - Fixed expenses (manufacturing and non manufacturing) Contribution margin…
Advantages of Variable or Direct or Marginal Costing System
Sidra Farid Advantages of Variable or Direct or Marginal Costing System Learning Objectives: What are the advantages of variable costing system? Why absorption costing continues to be used almost exclusively for external…
Job Order Costing in Service Companies
Job Order Costing in Service Companies: Job order costing is also used in service organizations such as law firms, movie studios, hospitals, and repair shops, as well as manufacturing companies.…
Customer-Level Activities Definition
Customer-Level Activities Definition: Activities that are carried out to support customers but that are not related to any specific product.
Interdepartmental Services Definition
Interdepartmental Services Definition: Services provided between service departments. Also see Reciprocal services
Job Order Costing – The Flow of Cost
Job Order Costing - The Flow of Cost: Learning objective of this article: Understand the flow of costs in a job order costing system and prepare appropriate journal entries to…
Curvilinear Costs Definition
Curvilinear Costs Definition: A relationship between cost and activity that is a curve rather than a straight line.
Advantages of Ledger
Advantages of Ledger Learning Objectives: What are the main advantages of ledger? The following are the advantages derived from ledger: It is the ledger through which successful application of double…
Insurance Policy Method of Depreciation
Insurance Policy Method of Depreciation: Learning Objectives: Define and explain the insurance policy method of depreciation. Definition and Explanation: Insurance policy method is a slight modification of the depreciation fund…
Job Order Costing System Exercises and Problems
Exercise 1-- Cost accumulation Procedure Determination Exercise 2-- Job order cost sheet Exercise 3-- Job order costing-T Accounts and Journal Entries Exercise 4-- Job Order Cycle Entries Exercise 5-- Journal…
Current Ratio
Current Ratio: It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is…
Current Assets to Proprietor’s Fund Ratio
Current Assets to Proprietor's Fund Ratio: Current Assets to Proprietors' Fund Ratio establishes the relationship between current assets and shareholder's funds. The purpose of this ratio is to calculate the…
Cross-Subsidization Definition
Cross-Subsidization Definition: Improper assignment of costs among a company's segments; also called cost distortion.
Informational Roles Definition
Informational Roles Definition: Managerial roles that involve receiving, collecting, and disseminating information. The three informational roles include monitor, disseminator, and spokesperson. Relevant Terms: Interpersonal Roles Decisional Roles