In the previous article, we have discussed absorption and variable costing in detail. This article is going to build upon the concepts discussed in the earlier article. If you have not yet read it, please read it before proceeding with this one. In the previous...
Costing is a measurement of the actual cost of a product or service. It is a tool that allows an organization to track its costs. Costing and budgeting are two terms that are often used interchangeably. They are different, however, in the way they are used. Costing is...
Sensitivity analysis is a capital budgeting technique for computing measures of risk for a planned investment or action. It is a method for determining how sensitive a project’s value is relative to the changes in each of the variables in the analysis. It is done by...
Varying inventory valuation methods are used by different business organizations. The most commonly used methods are FIFO (First-in First-out), LIFO (Last-in, First-out), and Weighted Average cost. Each method has its merits and demerits. LIFO method implies that the...
A business incurs numerous costs over its life cycle. Different approaches are used in long-term planning for the business, profits, costs, and other departmental matters. A contemporary approach of life cycle cost is becoming more common for capital budgeting, price...
LIFO Reserve The financial statements of any business are greatly affected by the choice of the inventory valuation method. The balance sheet, income statement, cash flow statement, and other key financial ratios reflect the choice and impact stakeholders’ decisions....
