Learning Curve

There are also various cost assumptions used by businesses, with every entity choosing a respective method in accordance to their inventories, based on the effects they

The Law of diminishing returns states that if one factor of production is increased while the others remain constant, the overall returns will relatively decrease after a certain point. The total fixed cost is the same regardless of the output; the total variable costs will change with the level of output resulting in the total cost as the sum of the fixed cost and variable cost at each level of output. Over the 0 to 4 range of output, the TVC and TC curves slope upward. They reflect a decreasing rate due to the increasing minor returns. The slopes curves will increase due to these diminishing marginal returns.

There are many trade-offs for each of the decisions that a company makes within all three types of these cost types when quality consideration is used. If the company decides to put more time into training employees properly on operating machines and

inventory using the cost method and did not change the method used during the current

“Companies can choose to use the accounting job order costing method when they have a single product line or numerous products to manufacture. However, it is less costly and less time-consuming if they elect to use process costing when calculating the manufacturing of a single product line. With similarities

In previous projects the learning curve has been 80%. The learning curve for principle is

The learning curve was chosen because of the strategic importance that is placed on a learning curve.

The costing approach should be based on per Transaction Basis rather than on per kit or per pound basis because of the following reasons:

William Lyon Phelps, an American author, a critic, and a scholar said: “the final test of a gentleman is respect for those who can be of no possible service to him.” What William is saying is that once you can respect other people no matter who they are or what they can do for you, you wont necessarily be a gentleman, but a better and more considerate person. My father has taught me one of the most important things that people are forgetting, show respect to other people and to be considerate of how what you say will make them feel.

The strategy used also takes into account the average production level of each employee and the resultant effect. The production units are rounded off to maintain a constant inventory level to increase flexible working conditions for employees and production itself.

Process costing is an easier system to use when costing homogenous products compared to other cost allocation methods. Each process applies direct materials, labor and manufacturing overhead to the production cost total. Management accountants take the total number of goods leaving the process and divide the total process cost by this number. This creates a simple average cost for each item produced. Another advantage is that business owners use process costing because it creates a flexible production process. Companies needing to refine their process can simply add or remove a process as necessary. This also allows companies to lower their production cost for each good. Adding a process allows companies to produce slightly different goods or improve product quality. This flexibility ensures companies can produce at the most competitive cost in the economic marketplace. Also process costing provides an approach to allocate costs to

With this costing technique , a Manager can easily determine if there is a weak link in production chain by keeping an eye on the cost per unit each day. Using the accounting programs involved in process costing, a manager can figure out where in the process the item 's per unit cost is going up. This way a single manager or a team of managers can monitor millions of units being produced without needing to check on each department unless a problem comes up. By the same token, these numbers need to be watched diligently, as a change of even a fraction of a cent can cost thousands of dollars quite quickly.

average cost. In the short-term, it may be acceptable to price below AC if this price exceeds

Furthermore, the ACC strategy of offering increased variety requires shorter production runs which inherently increases the cost associated with each product and packaging, as idle time due to process changeover would increase between each product production (4.8% of time com-pared with 2% for DJC). The strategy of increased variety and production runs by the ACC would also affect labor in a number of ways. Direct labor costs would go up due to a larger amount of idle time associated with process changeover and the chance of increased problems associated with the

In a weighted average method the equivalent units of production for a department are the number of units transferred to the next department of finished goods plus the equivalent units in the department’s ending work in process inventory.