Activity Based Costing System
Sidra Farid Activity Based Costing System A Tool for Management to Aid Decision Making: Learning Objectives: Define and explain activity based costing (ABC) system. How various manufacturing and non-manufacturing costs are treated…
Half-Year Convention Definition
Sana Ahmed Half-Year Convention Definition: A requirement under the Modified Accelerated Cost Recovery System (MACRS) that allows a company to take only a half year's depreciation in the first and last years…
Trend Analysis / Horizontal Analysis in financial Statements
Robert Definition and Explanation of Horizontal or Trend Analysis: Comparison of two or more year's financial data is known as horizontal analysis or trend analysis. Horizontal analysis is facilitated by showing changes between years in both dollar and…
Margin of Safety (MOS)
Learning Objectives: Define and explain margin of safety. Calculate margin of safety ratio in Percentage. What is its significance/importance? Calculation of merging of safety in cost volume profit analysis Contents: Definition…
Three Column Cash Book
Three Column Cash Book: Learning Objectives: Define and explain a three column cash book/treble column cash book. Prepare a three column cash book. What is the difference between a single…
Revenue Expenditures
Revenue Expenditures: Learning Objectives: Define and explain revenue expenditures. List of revenue expenditures. Definition and Explanation: Expenditures will be treated as revenue expenditures if it is incurred for the following purposes: Expenditure…
Petty Cash Book
Petty Cash Book: Learning Objectives: Define and explain petty cash book. What is the imprest system of petty cash? What are the advantages of Imprest system? Prepare a petty cash book. Definition and…
Activity Base Definition
Activity Base Definition Activity base is a measure of whatever causes the incurrence of a variable cost. For example, the total cost of X-ray film in a hospital will increase…
Depreciation Methods
Rubab Ali Depreciation Methods: Learning Objectives: What are the various methods for depreciation? Fixed assets differ from each other in their nature so widely that the same depreciation methods cannot be applied…
Cost Classifications on Financial Statements
Abida Rehman Cost Classifications on Financial Statements: Learning Objectives of this Article: Prepare a schedule of cost of goods manufactured. Prepare income statement including a schedule of cost of goods sold. Merchandising…
Depreciation Fund Method or Sinking Fund Method of Depreciation
Depreciation Fund Method or Sinking Fund Method of Depreciation: Learning Objectives: What is depreciation fund method or sinking fund method of depreciation? What are its advantages and disadvantages? Definition and…
By Products and Joint Products
Shamsa Rafique By Products and Joint Products: After studying this chapter you should be able to: Many industrial concerns are confronted with the difficult and often rather complicated problem of assigning costs…
Gross Profit Analysis Solved Problems
Gross Profit Analysis Solved Problems: Learning Objective: Calculate sales price variance, sales volume variance, cost price variance, cost volume variance, sales mix variance, and final sales volume variance. Problem 1:…
Cost Center Definition
Cost Center Definition: A business segment whose manager has control over cost but has no control over revenue or the use of investment funds.
By-Products and Main Products
By-Products and Main Products: Learning Objectives: Define and explain By-Products. Definition and Explanation of By Products: The term "by product" is generally used to denote one or more products of…
Gross Profit Analysis-Questions and Answers
Gross Profit Analysis-Questions and Answers: Questions: Why is the gross profit figure significant? What causes changes in the gross profit? Explain "product mix" or "sales mix." By what methods can…
Cost Behavior Definition
Cost Behavior Definition: Cost behavior is the way in which a cost reacts or responds to changes in the level of business activity.
Financial Statement Analysis
Financial Statement Analysis Learning Objectives: Prepare and interpret financial statements in comparative and common-size form. Compute and interpret financial ratios that would be most useful to a common stock holder.…