Definition: Kaizen costing is a technique of controlling the cost incurred over unproductive activities and resources which does not add any value to the organization. In simple words, it is a practical approach to solving cost-related problems to improve the overall efficiency of the organization. Kaizen costing is implemented in business organizations to manage the … [Read more...] about Kaizen Costing
Accounting
Depreciation Methods
Definition: Depreciation is the partial reduction of the value of fixed (tangible) assets used to carry out business operations, resulting out of its limited life span. It is set off against the revenue generated by such consumption each year. Every asset which is of a fixed nature tends to face obsoletion and physical deterioration due to its regular use. These assets include … [Read more...] about Depreciation Methods
Profitability Ratios
Definition: Profitability ratios are the financial measures to analyze the earning capacity and determine the financial soundness of the organization by comparing the earnings with the multiple expenditures and ensure the optimum utilization of the various resources. Profit is the ultimate aim of the business and analyzing the financial position of an organization using the … [Read more...] about Profitability Ratios
Cost Classification
Definition: Cost classification is the logical process of categorising the different costs involved in a business process according to their type, nature, frequency and other features to fulfil accounting objectives and facilitate economic analysis. Cost refers to the value sacrificed with the aim of gaining something in return. Every business process involves some cost. It is … [Read more...] about Cost Classification
Cost Accounting
Definition: Cost accounting is the accounting method for ensuring cost effectiveness by accumulating, organising, recording, calculating, analysing and assessing the overall expenses incurred on a product, process or project, etc. It is mostly used in industrial units or factories where the goods are manufactured. Unlike financial accounting, cost accounting is a broader … [Read more...] about Cost Accounting