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This theory is quite similar to the benefit theory whereby individuals pay taxes in relation to the benefits they receive from the state. However, the cost of service theory emphasizes the semi-commercial relationship between the state and the public to a greater extent. the main implications of this theory is that citizens are not entitled to any direct benefits from the state but instead they should reimburse the government or the state the cost incurred in the provision of government services. The cost of service theory if implemented would lead to a balanced budget because revenues raised by the government are a refund of the costs incurred. In real sense this is not possible so this theory suffers from the limitation that it is not possible to have a conceptual clarity of the measurement of cost. Also, just like the benefit theory , there is a problem on the measurement of cost on state services and the assignment of such costs to individual members of the society.
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What is the difference between in Normative theory and historical cost theory?
Normative theory focuses on what should be done based on ethical, moral, or societal principles, while historical cost theory values assets at their original purchase price. Normative theory considers broader implications and ethical considerations, while historical cost theory is more concerned with financial accuracy and reliability.
Differences between modern and traditional theory of cost?
The differences between modern and traditional theory of costs relate to international trade. Traditional theorists thought that there should be a separation from internal trade and internal relations while modern theorists felt the terms were the same.
What is the Alfred Weber's Theory of Industrial Location?
Alfred Weber's Theory of Industrial Location, also known as the Least Cost Theory, suggests that the location of industries is determined by minimizing transportation costs and maximizing profits. According to this theory, industries will locate where they can minimize the costs of transporting raw materials to the factory and finished products to the market. Weber classified industries into three categories based on their location factors: weight-gaining, weight-losing, and bulk-reducing.
WHAT IS THE DEFINITION OF LOCATION THEORY?
Location theory is a branch of economic geography that analyzes the optimal location of economic activities. It aims to understand why certain businesses choose specific locations based on factors such as cost, accessibility, and competition. By studying location theory, businesses can make informed decisions to maximize profits and efficiency.
Define high low method?
The high-low method is a technique used to separate fixed and variable costs within a mixed cost. By comparing the highest and lowest activity levels and the corresponding total costs, this method allows you to estimate the fixed and variable components of a cost.
Define cost price and selling price?
define cost and selling price
How does the cost sharing principle influence the level of taxation?
The cost sharing principle influences the level of taxation by replacing market prices with incurred costs.
Define value added?
Added value is the difference between the selling price of a good or service and the cost of brought in materials or the value of inputs
How would you define a standard cost?
A standard cost is a predetermined cost that a company expects to incur in producing a unit of product or providing a service. It is used as a benchmark for evaluating actual costs and performance. The standard cost is based on factors such as historical data, industry benchmarks, and management estimates.
Define the meaning of standard costing?
The term "standard cost" comes from the accounting area. Usually it describes the cost of producing a good or offering a service under regular conditions (so-called "sunshine" case).
What do accountants study?
Accounts, Taxation, Cost Accounting & Company Law
What is modern theory of cost of production?
the traditional theory explains cost curve u shape, but in modern theory says that cost curve L shape
How do you define food cost?
FOOD COST- ($)COST YOU SPEND ON FOOD( WHICH IS ALOT) :D
What is the monthly cost for your service?
What is the monthly cost for your service?
Define Detection cost?
costs of detecting
How would you define a current cost?
Current cost. Replacement cost or net realizable value.
Define direct and indirect labor cost in garment industry?
Define direct and indirect labour?"
