What is Leverage Ratios?
Leverage ratios is used to determine the relative level of debt load that a business has incurred. These ratios compare the total debt obligation to…
Accounting
What is Cost Object?
A cost object is any item for which costs are being separately measured. It is a key concept used in managing the costs of a…
What is the Cash to Cash Cycle?
The cash to cash cycle is the time period between when a business pays cash to its suppliers for inventory and receives cash from its…
What is Direct Material Cost?
Direct material cost is the cost of the raw materials and components used to create a product. The materials must be easily identifiable with the…
What is Average Collection Period?
The average collection period is the average number of days required to collect invoiced amounts from customers. The measure is used to determine the effectiveness…
What is an Irrelevant Cost?
An irrelevant cost is a cost that will not change as the result of a management decision. However, the same cost may be relevant to…
What is Relevant Cost?
A relevant cost is a cost that only relates to a specific management decision, and which will change in the future as a result of…
What is Differential Cost?
Differential cost is the difference between the cost of two alternative decisions, or of a change in output levels. The concept is used when there…
What is Committed Cost?
A committed cost is an investment that a business entity has already made and cannot recover by any means, as well as obligations already made…
What is Manufacturing Cost Accounting?
Manufacturing cost accounting encompasses several tasks that impact production operations and the valuation of inventory. These activities can significantly boost the profits of a business,…
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