What are different inventory valuation methods?
There are numerous valuation techniques to value the inventory or stock. However, here is the short list of those which are known. To learn more about each method, click the name! Specific identification method FIFO - First in, First out method LIFO - Last in, First out method HIFO - Highest in, First out NIFO […]
Is depreciation expense a fixed cost or a variable cost?
Let’s revisit the terms Fixed cost and Variable cost and then we will discuss where depreciation cost/expense really fits. Fixed costs are such costs that do not change with the change in activity level (e.g. units produced) with in the relevant range. Where relevant range can be defined in terms of time or activity level. […]
Is ‘Cost of goods sold’ a Product cost or a Period cost?
Before we discuss under what heading should we classify cost of goods sold, let’s first of all clear out our minds for the terms inventoriable costs and period costs with a quick review. You can the answer on difference between period costs and product costs in good detail here. Inventoriable costs (Product cost) or Product […]
What is the difference between Product cost and Period cost?
Product costs or Inventoriable costs are all such costs that form part of the inventory.These are basically such costs that relates directly to the products and are incurred to produce such products and also include the costs that are incurred to bring these products into saleable condition (or simply present location and condition). Examples are […]
What are different types of standards under standard costing?
Standard in simple words is a measure of what is expected to take place under the current or anticipated circumstances. Another way of defining standard is that it is something that is predetermined or planned and management wishes that actual results equate to standards. Standards are one of important quantitative tools in the hand of […]
What is Responsibility accounting?
In order to make the organization working at its best and reaching its potential to achieve objectives, the actual results are compared with the targets. And if those targets are not achieved someone must be held responsible. Because without accountability we cannot control business operations and cannot ensure the effective and efficient achievement of business […]
What is the difference between budgeting and forecasting?
Budgeting and Forecasting are two important constituents of managerial decision making process. Even though both of these functions are distinct and are not same but their use and their dependency on each other make them inseparable and thus many confuse the two as same and use them interchangeably. Let’s understand the technical difference between these […]
What is meant by Shadow prices?
Shadow price or dual price is a quantitative technique to analyze the improvement in the contribution or costs by having one additional unit of a resource which is causing a bottleneck. This analysis basically helps management in deciding whether a struggle to uplift the constraint is worthwhile or not. Before we look at the definition […]
Can we sit T5 T6 and T7 as CBE papers under transitional arrangement?
As CAT qualification is under a transition and all the CAT students will be transferred to new suit of qualifications Foundations in Accountancy FIA by ACCA, for this ACCA has arranged transitional arrangements for FIA students, MSER students and existing CAT students. Because of this transition existing CAT students are offered special option that they […]
