See Also: Inventory Turnover Ratio Perpetual Inventory System Just in Time Inventory System Inventory to Working Capital Analysis Value Drivers: Building Reliable Systems to Sustain Growth Just in Time Inventory System Definition The just in time inventory system, or JIT, is a system of managing inventory that is designed to improve efficiency and reduce waste
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
Inventory Shrinkage Definition Inventory shrinkage means that, somewhere along the line, there is a drop in product numbers from the time of manufacture to the time of sale. Clearly, this is a bad thing for both the consumer and the producer. On the producer side of things, the inventory shrinkage factor causes an uptick in
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
See Also: Variable vs Fixed Cost Marginal Costs Semi Variable Costs Standard Costing System How to Prepare a Break Even Analysis Fixed Costs Definition In accounting, fixed costs refer to costs that do not vary with production volume. They remain relatively constant regardless of the company’s level of production or business activity. Fixed costs are
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
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
See Also: Agency Costs Make-or-Buy Business Decision Lease Agreements Lessor versus Lessee National Association of Professional Employer Organizations (NAPEO) Service Department Cost Allocation In accounting, the costs of support service departments are allocated to the different departments within the organization that make use of those support services. There are several methods for allocating the costs
See Also: Current Assets Fixed Assets Balance Sheet Income Statement Depreciation Asset Disposal Definition Asset disposal is the act of selling an asset usually a long term asset that has been depreciated over its useful life like production equipment. Disposal of Assets Explanation According to its depreciation, many companies contain an asset disposal policy to
See Also: Cost Center Value Drivers: Building Reliable Systems to Sustain Growth Direct Labor Variance Formulas Direct Material Variance Formulas Step Method Allocation In accounting, the cost driver definition is a factor that incurs cost. Use cost drivers to allocate variable and indirect costs to production activities or output. Include both indirect costs and direct
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
See Also: Accounting Principles Accounting Concepts Point of Sale (POS) Method Installment Sales Method Percentage Completion (POC) Method Completed Production Method Definition Completed production method accounting includes recognizing revenue as the products roll off the assembly line or are available for transportation and sale. This means that the production process is considered to be the final
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