Accounting Management

Sunk Cost is a cost that has already been incurred and thus cannot be recovered. It should not be considered when making the decision to…

Opportunity Cost enters into your decision-making criteria when you have several options to consider, including spending the money on several choices of investment. It is…

Opportunity Cost is the cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you…

The Margin of Safety Ratio useful in planning business operation – In break-even analysis, the margin of safety is the extent by which actual or…

Segment Margin differs from Contribution Margin Contribution margin is the amount remaining from sales revenue once all variable costs have been removed. Contribution margin ratio…

Responsibility accounting involves a company’s internal accounting and budgeting. The objective is to assist in the planning and control of a company’s responsibility centers –…

Decentralization refers to a company’s top management delegating authority to subunits of the company. A decentralized system is one which requires multiple parties to make…

A rate of return is the measure of profit as a percentage of investment. The rate returns is another capital budgeting technique that does not…

Decentralization Transfer of decision-making power and assignment of accountability and responsibility for results. It is a form in which managers at the lower levels have…

Segment margin: The difference between the revenue of a segment and the direct costs of the segment represents the amount of income that has been…