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Cost reduction is the process used by organisations aiming to reduce their costs and increase their profits, or to accommodate reduced income.Depending on a company’s services or products, the strategies can vary.
Cost accounting has long been used to help managers understand the costs of running a business. Modern cost accounting originated during the Industrial Revolution when the complexities of running large scale businesses led to the development of systems for recording and tracking costs to help business owners and managers make decisions. Various ...
Labor costs are direct costs, that is, they can be identified among the total cost and assigned to a certain cost objective. [1] Labor costs are defined by categories (e.g. service labor or manufacturing labor), the attribution of a labor rate for each category, and a certain number of labor hours. [1]
Everyone is focused on Dendreon's cost-cutting measures to get the biotech to profitability. And for good reason -- in the fourth quarter of 2011, a whopping 74% of net product sales were used to ...
A common example of a sunk cost for a business is the promotion of a brand name. This type of marketing incurs costs that cannot normally be recovered [citation needed]. It is not typically possible to later "demote" one's brand names in exchange for cash [citation needed]. A second example is research and development (R&D) costs.
Third (and relatedly), preventing fraud costs money: The Congressional Budget Office, for example, assumes that each dollar spent on measures to prevent health care fraud generates $1.50 in savings.
Value engineering can lead to the substitution of lower-cost materials, as with the exterior cladding that accelerated the Grenfell Tower fire in London. [1] [2]Value engineering (VE) is a systematic analysis of the functions of various components and materials to lower the cost of goods, products and services with a tolerable loss of performance or functionality.
A relevant cost (also called avoidable cost or differential cost) [1] is a cost that differs between alternatives being considered. [2] In order for a cost to be a relevant cost it must be: