Tag: manufacturing

Indemnity Clause

See Also: Blue Sky Laws Tips on How to Manage your Lawyer Steps to Track Money In and Out of a Company Accounting Asset Definition Indemnity Clause Definition The indemnity clause definition is the clause which compensates either party in a contract against loss. It is one of the most common ways for a party

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Labor Costs

See Also: Absorption vs Variable Costing Agency Costs Operating Capital Replacement Costs Labor Costs Definition The labor costs definition is the total cost of all labor used in a business. It is one of the most substantial operating costs. These are particularly important in any business which experience heavy human resource labor costs: construction, manufacturing,

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Joint Costs

See Also: Sunk Costs Inventoriable Costs Financial Distress Costs Agency Costs Bankruptcy Costs Joint Costs Definition In accounting, a joint cost is a cost incurred in a joint process. Joint costs may include direct material, direct labor, and overhead costs incurred during a joint production process. A joint process is a production process in which

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Job Costing

See Also: Implementing Activity Based Costing Standard Costing System Process Costing Activity-based Costing (ABC) vs Traditional Costing Absorption vs Variable Costing Job Costing Definition Job costing is defined as a method of recording the costs of a manufacturing job, rather than process. With job costing systems, a project manager or accountant can keep track of

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Horizontal Integration

See Also: Vertical Integration Business Intelligence and Finance Business Cycle Manufacturing Cost Economic Production Run (EPR) Horizontal Integration Definition Horizontal integration means that a company contains control over one part of the production process by controlling the majority or all of the resources at that particular junction of production. Explanation of Horizontal Integration Horizontal integration’s

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Direct Labor

See Also: Direct Cost vs Indirect Cost Cost Driver Direct Materials Direct Labor Variance Formulas Absorption Cost Accounting Direct Material Variance Formulas In accounting, direct labor (DL) costs are the costs associated with paying workers to make a product or provide a service. The workers must be clearly involved in producing the product or providing the service. Direct

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Ex Works (EXW)

See Also: Freight on Board (FOB) Transfer Risk How to manage inventory Accounting Principles Accounting Concepts Ex Works (EXW) Definition Ex works is an agreement between a buyer and a seller that the seller assumes no responsibility for the cost or liability for a product after it is produced and has left the seller’s warehouse.

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Economic Production Run (EPR)

See Also: Economic Value Added Economic Order Quantity Accounting Income vs Economic Income Supply Chain and Logistics Work in Progress Economic Production Run (EPR) Definition Economic production run is the most cost-efficient quantity of units to produce at a time. When managers of a manufacturing operation make decisions about the number of units to produce

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Cost Center

See also: Cost Driver Variable vs Fixed Cost Sunk Costs Activity Based Costing vs Traditional Costing Removal Cost Profit Center Responsibility Center Adding Value as a Financial Leader Cost Center Definition In accounting, a cost center is a type of responsibility center. A responsibility center is an organizational subunit the manager of which is responsible

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Benchmarking

See Also: Are You Collecting Business Data? Business Intelligence and Finance Marking-to-Market Company Life Cycle Market Positioning Budgeting 101: Creating Successful Budgets Navigating Black Swan Events Problems When Experiencing Business Growth Benchmarking Analysis What is benchmarking analysis? Benchmarking is the process of comparing a company’s performance to the performance of other companies. Management can do

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Activity Based Costing

See Also: Activity-based Costing (ABC) vs Traditional Costing Activity Based Costing Activity based costing is a system that attempts to accurately trace indirect costs to products by allocating indirect costs to activities and then to products based on their usage of the activities. ABC is optimal when accuracy is very important and when indirect costs

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Absorption vs Variable Costing

Absorption vs Variable Costing Meaning In the field of accounting, variable costing (direct costing) and absorption costing (full costing) are two different methods of applying production costs to products or services. The difference between the two methods is in the treatment of fixed manufacturing overhead costs. Under the direct costing method, fixed manufacturing overhead costs are expensed during

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