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Fundamentally the process of defining the variable and fixed costs allows management to create a synopsis of the final unit cost. However it is the combination factors of the unit cost multiplied by the total output to be created that will finalize the price point. The flexibility here allows the pricing structure to adjust according to the market actual resistance or expectation.
When the product is seating at the storage until is sold, the same creates addtional cost that must be absorbed by the time it takes to sell. Management decisions and Accountants realistic approach to correct the price structure will allow the company to operate in the most profitable manner possible and guaranteeing its sustainability.
Renato Souza - Brazilian Economist 2010 wrensouza@Yahoo.com
To add to Renato's thorough response, from a practical point of you, the US government requires you to track direct and indirect costs separately if you have cost-reimbursable contracts with them. The Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS) have very strict standards regarding the tracking of direct costs and allocation of indirect costs among government contracts. Designing your system to do this from the beginning will solve you a lot of headache later if you decide to do business with the federal government.
Mark Goldstein - Government Contracting Consultant
What else can I help you with?
What are the direct and indirect costs of unsafe work habits?
i dint know
What are the examples of direct tax and indirect taxes?
...not sure but an direct tax is when you are taxed right then and there and you know about it ...a indirect tax is when you are taxed later on and don't know about it
Why direct and indirect users of accounting interested in the data?
to know the business performance. to consider whether to invest or not
Why is it important for a business to know about all its costs?
•Lower costs mean higher profit. •They show managers are efficient. •If costs are kept down, more money can be spent (invested) to improve the business. •If you can lower costs, you can lower prices and sales will increase. •The business must know what its costs are in order to cut them. •If costs are high it shows the business is wasting money.
What is the importance of fixed costs versus variable costs in making a business profitable?
The importance of knowing which costs are fixed and which costs are very important in making a business profitable. In order to budget effectively, one needs to know costs that will always be the same (fixed) and the ones that sometimes change (variable).
What are the direct and indirect costs of unsafe work habits?
i dint know
What are the advantages of using normal costing?
direct prod cost: you know what the real cost will be indirect costs: still and estimate on how to spread cost but real base of total indirect costs to start from
What are the examples of direct tax and indirect taxes?
...not sure but an direct tax is when you are taxed right then and there and you know about it ...a indirect tax is when you are taxed later on and don't know about it
What is empirical investigation?
Is to know about something by direct/indirect investigation.
What punctuation mark follows an indirect question?
An indirect question should be followed by a question mark (i.e., ?) the same as any other question. Direct: Where does he live? Indirect: Do you know where he lives?
Frequency modulation direct and indirect FM generation method?
I know the answer,but I just can reply it in Chinese.
How do you know if its a direct object or indirect object?
Direct objects answer the question "what" and Indierect object answer the question for whomI bought Jack a phone. I gave Jack the phone.In these sentences Jack is the indirect object. The indirect object goes before the direct object. Phone is the direct object.The indirect object can be changed into a phrase using toor for.I gave the phone to Jack.and:I bought a phone for Jack
Why direct and indirect users of accounting interested in the data?
to know the business performance. to consider whether to invest or not
How is an indirect tax different from a direct tax?
When its just tax, you know about what is, where it comes from and what %. Indirect or stealth taxes are 'hidden' and not obvious what they are for or how much they are..they are usually hidden in the cost of something.
What mark of punctuation follows an indirect question?
An indirect question should be followed by a question mark (i.e., ?) the same as any other question. Direct: Where does he live? Indirect: Do you know where he lives?
Who are Kellogg's Three main competitors?
Choose a well-known company that you know of, and describe its direct and indirect competitors. Describe at least three direct competitors and three indirect competitors.
What is the direct and indirect object of this sentence The teacher read the students a proverb at the end of the class?
Direct Object: "a proverb" Indirect Object: "The students" You know this because you can ask the following questions: Q: What is the teacher reading? A: A proverb Because the teacher is reading a proverb (and not the students), a proverb is the object. Q: To whom is she reading? A: The students Because the proverb is being read to the students, the students are the indirect object.
