The variables that are held settled in the supply schedule are input costs, technology, price expectations, and government taxes or subsidies. To get the information for a supply curve, we change just the cost of a good and watch how a maker reacts to the price change. The individual supply curve is positively sloped, reflecting the law of supply. The law of supply: Like the law of demand, the law of supply shows the amounts that will be sold at a certain price. This means higher the price, higher the quantity supplied.
Relevance and importance of cost accounting Cost control Cost control is a modus operandi utilized in minimizing cost of products and services without affecting its quality but instead, increasing its efficiency. There are various methods for controlling costs, namely, standard costing and budgetary control. Controlling cost is the rudiment of management accounting because it entails the juxtaposition of the actual results against the devised results. Costing provides management control in inventory levels, such as stock of materials, work-in-progress and finished goods. Costs can be retrenched in the long-run when alternatives would have been ventured.
The relationship between price elasticity of demand and total revenue bring together some important microeconomic concepts (Miller 2012). In the previous question, you can see how raising a price can bring the demand for a product down. This will have an obvious effect on total revenue and will help a firm when it comes time to change its price. There are times when changing the price of a product will not create less or more of a demand for a
It deals with how operating profit is affected by changes in variable costs, fixed costs, selling price per unit and the sales mix of two or more different products. i. Project planning Profit planning assists in finding the most profitable combination between selling price, cost and volume, and hence it enables calculations of profit at different sales levels. It assumes that sales volume is the primary cost driver. Therefore, managers need to take measures to increase profits by reducing costs, especially variable costs per unit, which vary with the level of activity.
According to procurement and supplies the SCM is achieved with the holistic management and integration of suppliers into product and manufacturing activities. Better logistics and transport system reduce the cost and inventory within and outside the organizations involved in supply chain (Lamming, 1993). The different views of researcher’s present view with are restricted to the relationship between the buyers and sellers. In a supply chain it is important to have a network of customers, suppliers, transport companies and even the competitors to unite in order to serve a purpose of common interests to save and cut time and resources (Dolatabadi, bazrpash, 2006). A summarized definition is provided by Stock and Boyer (2009).
could be eliminated and so as to reduce the demand fluctuations. Hence, the distributors could release more inventories space and cost and they will be more competitive to react to the variability like after season stock, new products etc. Improvement in customer fill rate for both Barilla and the distributors: the system puts emphasis on quick response. Since Barilla controls the inventory data and delivery pattern, the production and deliveries are then easier to be scheduled by the distributors to satisfy the consumers? needs.
The income elasticity of demand is used to predict the consumption of the goods and services that will be produced in the near future whereas, the cross elasticity helps a producer to make correct decision and predict how much the demand of their product fall with the fall in the price of its substitute. The elasticity of supply in long run is more elastic than in short run therefore, an enterprising firm can take time to produce their product in such a way that the cost of production is at its minimum, the profit at its maximum and the welfare service at the maximum. The business firm gets enough time to make decision which will help their business in increasing their sales. Therefore, it is important to make right decision to increase the revenue as well as welfare of the
A rise in this ratio can signify that the firm has a competitive edge in the market and so it is able to charge higher prices for its products, or the firm is able to obtain its supplies at a lower cost. If this ratio remains stable while the net profit ratio is falling, which is the case for EYSI; this can signify that the control over expenses is weak. (CIMA, 2012) mentioned that the net profit ratio signifies the profit from trading operations before the interest costs are
It is in a straight line connected and exact to the trade, and exemplifies chances inside the supply pedestal to moreover lessen price otherwise augment the cost of goods or services requisite via the industry. usually, it comprise insist supervision and supplier management. though, more and more it is vital to feature in whole rate of possession (TCO) and sustainability. Strategic sourcing benefits for an organization include: 1. Improved ability of the organization to achieve strategic goals due to alignment of purchasing strategies with business strategies.
There are three common methods that used in managing the company inventories, like: First In, First Out; Last In, First Out; and Average cost. The company can use any method as it wants, and it can change them method after its financial year calendar finished. There are many factors that effect on the company decision for which methods to use, like: nature of the product, variability of prices, manager purposes, taxation system and others. There are many advantages for the FIFO method, like; easy to understand, accepted in US GAAP and IFRS, is good when prices are tend to increase, the pending inventory prices are close to the market prices, and the products in the store are up to date. From other side, using this method has disadvantages, like; when the prices are tend to increase, the company current profit will increase and this will make the company to pay more taxes, not good when the prices are tend to