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Sometimes,when a company has spare production capacity,it is willing to fulfill SPECIAL ORDERS for non-regular customers. Normally,the prices quoted are lower than those regular customers. So when do a Company Accept or Reject a Special Order? Generally,the rule is to accept the [...] At times,management needs to decide whether to manufacture the product or to buy the ready made from other companies. The following are some reasons to buy from other companies: Flexibility to meet urgent demand of customers;Overcome limiting factor problem ( Part 3);Concentrate on its [...] As a result of limited supply of resources constraint,a company normally cannot produces as many products as it wish. The limited supply of resources can be in many forms like limited cash,labor time,material/machine availability and others. In line with the limited resources,the production manager therefore needs to plan [...] The following are some other cost techniques which are useful to management’s decision making: Opportunity Cost Represents the opportunities which have been forgone by following one course of action rather than an alternative course. The opportunity cost in this case is the profit foregone by utilizing scarce resources for one [...] It is important that Management needs to have sufficient and relevant information to make the correct decisions. Hence,the need to understand relevant costs. What really is Relevant cost? A relevant cost relates to future expected costs that will differ with each alternative used. Because of the [...] |  FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach. | |||||
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