Managerial accounting involve with costs identifying, costs allocating, cost calculating, costs measuring, cost analysing and costs interpreting. There are many topics that we cover related to managerial accounting or costs accounting:
Introduction Market penetration pricing is defined as offering a product or service at a lower cost to achieve greater market share in a particular market segment. The seller may sell the product at a loss to gain market share from established players in the market. It is a very common strategy that is adopted by …
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Job order costing is a costing method that is used for determining the production cost of each product. If a business or company produces different and unique products for customers then the business might need a job order costing system to properly manage each product and order. A job order costing system helps to ensure …
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To run a profitable business, you have to make sure that your prices are high enough to cover all your expenses and give you profits at the same time. Most business and company owners use cost allocation to allocate the costs of specific items. That includes products, departments, materials, overhead costs, etc. Cost allocation is …
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In many industries, a common manufacturing process generates multiple products, such products derived by this process are called Joint products or By-products. It is in their very nature that Joint products or By-products can’t be produced individually. While manufacturing, there comes the point where those yielded products get differentiated from each other. That very point …
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Process costing Process costing is a method of allocating costs in the manufacturing environment where production is carried in batches and requires different stages to be completed. As the product keeps completing the stage of production, the cost is added for each completed stage. Once, all the production activities are completed the product is ready …
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Definition: Price skimming is when the business launches a new product and charges a higher price from the customers. This strategy of pricing sets the highest initial price and lowers the price with the passage of time. At the initial time of the launch, the target customers are the rich people of the society with …
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Price discrimination Price discrimination is when the business charges different prices to different groups of people. The business may define different groups based on the attribution/characteristics of the customers within a certain group. The price discrimination is carried based on the expectation of the business from the seller that how much value they perceive from …
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Linear programming is a management/mathematical approach to find the best outcome, giving a set of limited resources. Thousands of businesses emerge every year, as more people aim to be business owners. Most of these businesses do not experience growth and eventually fold up due to failure in management accounting. How should businesses manage production challenges …
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Resources required for production can be quite scarce. Besides, one level of input might be needed to produce different products at different levels of output. Limiting factor analysis is the technique used to figure out how to maximize your production output despite the various limitations that confront the production process. Every business aims to maximize …
One short-term decision that businesses continuously have to make is whether or not to accept special orders. This decision can prove somewhat of a complication to companies because they do not anticipate it when creating their yearly budget. Although it might be outside an organization’s scope of activity, it can earn more revenue and crush …
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