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- Activity Based Costing
- Balanced Scorecard
- Cash Budgeting
- Environmental Accounting
- Investment Appraisal
- Labour Costing
- Life Cycle Costing
- Marginal Cost
- Materials and Stock Management
- Process Costing
- Risk and Uncertainty
- Standard Costing
- Study Skills
- Throughput Accounting
- Time Series Analysis
- Transfer Pricing
- Variance Analysis
We are used to the idea of indices showing an upward trend, but in calculating we need to be also able to deal with the situation when costs/values fall.
An example would be house prices currently.
Comprehensive discussion of Target Costing.
When making a decision about a long term investment we need to apply a discount rate to reflect the changing value of money over time.
This principle applies also in the context of awarding sums of compensation as in this article. The money required to provide a return of a certain level has to take in to account a discount rate.
here we see a change in the discount rate required to ensure that compensation is sufficient. Essentially it means a need for larger awards.
We tend to look at the BS in the context of measuring performance against a company’s objectives, but it can be used for a Department or even an individual (as here).
An interesting comment in the comments space below too, about some of the practical issues.
Discussion of using Pareto Analysis to help a company develop. It uses the usal 80:20 ‘rule’ as if it an actual rule rather than a common occurrence. But it is still interesting on how the process can be used.
Target costing is all about keeping costs at a particular level so that profit margins can be maintained at a particular selling price.
This can be done through efficiency, redesign, automation, reduction in quality or sometimes reduction in quantity.
Usually when a company reduces the quantity of product it sells for the same price it gets away with it. for Toblerone, the new design and reduction in chocolate was a bit too obvious.
The author of this letter points out a common misconception about costs. The average cost of providing a service is not the same as the additional cost of providing one more. Written about the context of education costs in an American town, it has relevance anywhere where you can ‘add one more’ without increasing fixed costs.
“But currently our schools are way below capacity and adding new students would add virtually no additional costs. ”