Total And Cost Gap Order Flashcards
1
Q
The order
A
Raw materials
Direct labour
Delivery
Production overheads
Admin overheads
Total cost
Capital employed
Return
Return required
Units
Return/unit
Price
Target cost
Cost gap
2
Q
How can you use abc costing
A
Current cost allocation doesn’t give them vision of costs - abc costing helps identify cost drivers by directly linking costs to products or services
Current cost allocation method isn’t accurate - ABC costing captures complexity in operations
3
Q
Benefits of target costing in early stage of development
A
It may make them consider the market before product launch
They would only include features that are of value to customers
Cost control will begin earlier in the process
Tends to get things right first and this reduces time to market
