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Within an organization, it may be a work order for manufacturing, a preventive maintenance order, or an order to make repairs to a facility. In many businesses, orders are used to collect and report costs and revenues according to well-defined purposes. Then it is possible to show for what purposes costs have been incurred.
The latter utilize cost drivers to attach activity costs to outputs. [1] The Institute of Cost Accountants of India says, ABC systems calculate the costs of individual activities and assign costs to cost objects such as products and services on the basis of the activities undertaken to produce each product or services. It accurately identifies ...
Fuel costs such as power for operations, fuel for production; Public Utilities such as telephone service, Internet connectivity, etc. Maintenance of equipment; Office supplies and consumables; Insurance premium; Depreciation of equipment and eventual replacement costs (unless the facility has no moving parts it probably will wear out eventually)
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Menu costs are the costs incurred by the business when it changes the prices it offers customers. A typical example is a restaurant that has to reprint the new menu when it needs to change the prices of its in-store goods. So, menu costs are one factor that can contribute to nominal rigidity. Firms are faced with the decision to alter prices ...
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Some examples of indirect costs and their drivers are: indirect costs for maintenance, with the possible driver of this cost being the number of machine hours; or the indirect cost of handling raw-material cost, which may be driven by the number of orders received; or inspection costs that are driven by the number of inspections or the hours of ...