Define Activity
Activity: The real work task or step executed in generating and delivering products and services. The aggregation of actions executed within an organization which is helpful for the purpose of activity-based costing.
ACCOUNTING CONCEPTS: Presented below are basic accounting principles or concepts, with which hospital managers should be familiar and that they should understand i
Activity-Based Costing: It is a cost accounting process that measures the cost and performance of process related activities and cost objects. It assigns cost to cost objects, like products or customers, based on their utilization of
Job Order Costing: A technique of cost accounting which accrued costs for individual jobs or lots. A job might be a service or manufactured item, like the repair of tools or the treatment of a patient in the hospital.
ACCOUNTING PROCESS: The process of Accounting involves the following steps: Q : What is Incremental Cost Incremental Incremental Cost: The raise or reduction in total costs which would result from a decision to raise or reduce output level, to add a service or task, or to modify any part of operations. This information aids in making decisions such
Incremental Cost: The raise or reduction in total costs which would result from a decision to raise or reduce output level, to add a service or task, or to modify any part of operations. This information aids in making decisions such
Avoidable Cost: The cost related with an activity which would not be acquired if the activity were not executed.
Differential Cost: The cost difference predicted when one course of action is adopted rather than others.
From the books of Aggarwal Bors, the following information have been extracted: Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax 40% The firm is proposing to buy a new plant which can generate additional annual profit of Rs. 10,000. The fixed
Support Costs: Costs of activities are not directly related with the production. Typical illustrations are the costs of automation support, postage, communications, process engineering, and purchasing.
Operating Budgets: It is a financial document which aids a business in making significant decisions regarding its actions. An operating budget does not contain instant impact on the actual state of the business and exhibits only future projections. Bu
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