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Process costing is an accounting methodology that traces and accumulates direct costs, and allocates indirect costs of a manufacturing process. [1] Costs are assigned to products, usually in a large batch, which might include an entire month's production. Eventually, costs have to be allocated to individual units of product.
Cost engineering is "the engineering practice devoted to the management of project cost, involving such activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis". [1] "Cost Engineers budget, plan and monitor investment projects. They seek the optimum balance between cost, quality and time requirements." [2]
Every decision in the product development process affects cost: design is typically considered to account for 70–80% of the final cost of a project such as an engineering project [1] or the construction of a building. [2] In the public sector, cost reduction programs can be used where income is reduced or to reduce debt levels. [3]
Independent research evaluating the use of automated expense management systems has confirmed that the cost of processing an expense claim is reduced as the level of automation increases. Organizations may automate their expense management processes for reasons such as compliance, cost reduction, control, and employee productivity. [1]
Cost classifications based on functions, activities, products, processes and on the information needs of the organization in its planning and control. Cost classifications based on the types of transactions. Combines objective and subjective assessment of costs contributing to a standard result. Aims to present a 'true and fair' view of ...
is a modeling process applicable for full scope as well as for partial views. helps to identify inefficient products, departments and activities. helps to allocate more resources on profitable products, departments and activities. helps to control the costs at any per-product-level level and on a departmental level.
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Product cost management (PCM) is a set of tools, processes, methods, and culture used by firms who develop and manufacture products to ensure that a product meets its profit (or cost) target. Scope [ edit ]