RESEARCH STUDY On Responsibility Accounting

The ultimate aim of any cost accounting system is to discover true cost of a product in a diversified and scattered company. For this purpose, new techniques are approaching while old techniques are being improved. The latest development is ABC-EVA approach which takes into account all costs and expenses for working out true cost of something. True cost has been ascertained Once, the next phase is accountability of the managers and local mind. If they did well, they might be compensated else warned or penalized for improvement of their performance. In order to do so, the key activities of any large company are converted or decentralized into semi-autonomous devices.

Responsibility accounting has a number of advantages such as: (i) it offers ways to manage an organization that would usually be unmanageable. It allows more impressive range managers to focus on proper planning and policy making and (iii) It motivates lower level managers and employees. At the same times, there are specific disadvantages like it turns an organization into “functional silos” where individuals concentrate on their own jobs and disregard the company as an entity.

Orient Industries Ltd is operating three products: (i) Toys, (ii) Garments and (iii) Sweets. The products are sold all around the national country. For control and planning, the company has divided its procedures into three regions; (i) Karachi, (ii) Lahore and (iii) Peshawar. Karamat Raja, the management accountant, was asked to get ready necessary working papers including income claims both on products and locations. Raja held necessary discussions with other managers for learning some basis for distribution of Fixed costs and expenses over products and regions.

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Fixed manufacturing over head costs should be allocated to both product and areas on the basis of percentage of the variable costs to total variable costs. In case of depreciation, devices produced may be treated as cost drivers. Register or subscribe and post using a HubPages Network account. 0 of 8192 characters usedPost CommentNo HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.

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But the complete definition can vary because different institutions of economists define production quite differently. Just how do high interest rates affect consumption expenditure? High rates of interest will make saving more attractive to consumers than spending. They’ll get an increased return on the money if they save it, which leads them to put more of their money into saving. Is fuel or diesel more volatile? Gasoline is more volatile than diesel. Is hydrochloric acidity more volatile than nitric acidity?

Is ethanol more volatile than methanol? Ethanol is more volatile than methanol. Is ethanol more volatile than acetone? Acetone is more volatile than ethanol. Is ethylamine more volatile than methylamine? Ethylamine is more volatile than methylamine. Why would the Fed decrease money source? If the Given desires to sluggish the speed of trader and consumer spending, it could restrain the development of credit and money.

The decrease in money available throughout the market leads to a reduction in investment and spending as the option of capital lowers and it becomes more expensive to acquire. This limiting of usage of capital slows down economic development as investment lowers. Shift in the aggregate demand curve? Understand that aggregate demand comprises consumer spending, investment spending, federal government spending, and world wide web export spending. Many things impact consumer spending.

The main things are consumer prosperity, consumer expectations, household indebtedness, and taxes. The wealthier the consumers, the more they shall spend. The higher the consumer’s expectations are, the more they will spend. The lower the consumer’s indebtedness, the greater they’ll spend. The low their taxes are, the more they’ll spend. How exactly does a fall in the real interest rate affect consumption decisions?