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What is traditional approach income statement?
In traditional approach income statement, overheads are charged to product based on predetermined rate rather then based on actual activity.
Why might a consulting firm use noraml costing system rather than actual costing system?
A consulting firm might use a normal costing system instead of an actual costing system primarily for ease of budgeting and forecasting. Normal costing allows the firm to apply overhead costs based on a predetermined rate, which simplifies the allocation process and provides more timely financial information. This approach also helps in managing cash flow and maintaining consistent pricing strategies, as actual costs can fluctuate significantly based on project demands. Additionally, normal costing can facilitate performance evaluation by providing a stable basis for comparing projected versus actual results.
In accounting is mileage a direct cost or an overhead?
Mileage is a overhead cost as mileage of cars or trucks which are not directly related with the manufacturing of units of products but required to transfer raw material from one place to another so it is overhead cost rather direct cost.
When applying overhead to products in an activity-based costing system?
In an activity-based costing (ABC) system, overhead is applied to products based on the specific activities that drive costs, rather than spreading costs uniformly across all products. This method involves identifying various activities, assigning costs to these activities, and then determining cost drivers for each activity. Products are then charged for overhead based on their consumption of these activities, leading to a more accurate reflection of the actual cost of producing each product. This approach helps businesses make better pricing, budgeting, and product mix decisions.
What advantage does a normal costing system offer?
1.)Income smoothing purpose- Applied FOH rate is an average or normalised rate used in calculation of applied FOH cost.- Use only one surrogate as a FOH cost driver rather than FOH cost are being affected by many one-off and/ or uncontrollable factors2.) More timely factory overhead costs information (Esp. for pricing purpose)- Estimated (applied) FOHs can be made available before actual FOHs are available.3.) Removal of incentive for managers to produce for inventory. If the value of inventories includes FFO (Which is fixed cost), managers can bolster operating profit by producing more units than are sold.-->> Applied overhead cost = variable cost4.) Providing a basis for monitoring evaluating and controlling overhead costs by means of variance analysis.-->> Underapplied FOH = Applied FOH < Actual FOH -->> Unfavourable-->> Overapplied FOH = Applied FOH > Actual FOH -->> Favourable
Why some company uses budgeted overhead costs rather than actual costs?
the reason was: control the budget,
What is traditional approach income statement?
In traditional approach income statement, overheads are charged to product based on predetermined rate rather then based on actual activity.
Activity based accounting?
Activity based accounting is a process in which factory overhead cost is allocated to different departments based on activity performed by those departments rather based on any predetermined rate.
Is depreciation manufacturing labor?
Depreciation is not a manufacturing labor rather it is manufacturing overhead as machines used in manufacturing is not part of labor rather it is part of overhead.
Why might a consulting firm use noraml costing system rather than actual costing system?
A consulting firm might use a normal costing system instead of an actual costing system primarily for ease of budgeting and forecasting. Normal costing allows the firm to apply overhead costs based on a predetermined rate, which simplifies the allocation process and provides more timely financial information. This approach also helps in managing cash flow and maintaining consistent pricing strategies, as actual costs can fluctuate significantly based on project demands. Additionally, normal costing can facilitate performance evaluation by providing a stable basis for comparing projected versus actual results.
What is a DOHC motor?
It is an engine rather than motor - Double OverHead Cam
What is underground power transmission?
power cables under ground rather then overhead.
What is dogmatic absolutism?
Dogmatic Absolutism is believing the truth is acquired not through reasoning and inquiry but, rather, through some predetermined, nonintellectual faith.
In accounting is mileage a direct cost or an overhead?
Mileage is a overhead cost as mileage of cars or trucks which are not directly related with the manufacturing of units of products but required to transfer raw material from one place to another so it is overhead cost rather direct cost.
Am I more likely to find part time jobs in this economy than full time?
No. The migration has actually been from permanent hire to temp rather than full-time to part-time. It's more overhead for companies to hire lots of part-time workers.
Are boating charter services rather interesting for big companies?
Boat charter services are available to anyone who can afford them. In fact most of them would rather charter to an individual rather than rely on companies for business.
Is actual an adjective?
Yes, "actual" is an adjective that describes something that is real or existing in fact, rather than imagined or supposed.
