cost avoidance is defined as
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Cost Reduction and Cost Avoidance Cost Reduction and Cost Avoidance Cost reduction can be generally defined as the act of cutting costs to improve profitability. Cost reduction is often confused with cost avoidance, which is more properly defined as the act of eliminating costs or preventing their occurrence in the first place. Both types of cost control, which are two sides of the cost containment coin, are important and necessary for a company that wants to achieve and maintain profitability, especially in a weak economy.
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Lower of cost or market Lower of cost or market. Lower of cost or market (LCM or LOCOM) is a conservative approach to valuing and reporting inventory. Normally, ending inventory is stated at historical cost. However, there are times when the original cost of the ending inventory is greater than the net realizable value, and thus the inventory has lost value.
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Cost accounting Cost accounting is a process of collecting, analyzing, summarizing and evaluating various alternative courses of action. Its goal is to advise the management on the most appropriate course of action based on the cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future.
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Cost control Cost control definition and usage. Cost control is a series of steps that a business uses to maintain proper control over its costs. Implementing this level of control can have a profound positive impact on profits over the long term.
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What is an 'Avoidable Cost' An expense that will not be incurred if a particular activity is not performed. Avoidable cost refers to variable costs that can be avoided, unlike most fixed costs, which are typically unavoidable.While avoidable costs are often viewed as negative costs, they may be necessary to achieve certain goals or thresholds.Next Up.or example, a manufacturer with many product lines can drop one of the lines, thereby eliminating associated expenses such as labor and materials. Corporations looking for methods to reduce or eliminate expenses often analyze avoidable costs associated with underperforming or non-profitable product lines.
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Relevant cost Relevant cost. A relevant cost (also called avoidable cost or differential cost) is a cost that differs between alternatives being considered. It is often important for businesses to distinguish between relevant and irrelevant costs when analyzing alternatives because erroneously considering irrelevant costs can lead to unsound business decisions. Also, ignoring irrelevant data in analysis can save time and effort.
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Cost Reduction Services Cost Reduction Services. Cost Savings Initiatives, LLC (“CSI”) believes in taking a holistic active approach to manage costs and reduce expenses for your business or organization. CSI offers a comprehensive suite of cost reduction services that address most expense items of your company or organization.ur Goal is Simple – We help you Increase Revenues and Decrease Expenses. There is no reason to leave money on the table. Our cost reduction services will maximize your savings by utilizing the newest technology, using our vast industry expertise and by leveraging the buying influence of a large network of purchasers.
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low cost strategy low cost strategy. A pricing strategy in which a company offers a relatively low price to stimulate demand and gain market share. It is one of three generic marketing strategies (see differentiation strategy and focus strategy for the other two) that can be adopted by any company, and is usually employed where the product has few or no competitive advantage or where economies of scale are achievable with higher production volumes. Also called low price strategy.
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- From this perspective, the morality of tax avoidance isn’t black and white. If long-term prosperity is dependent on growth, which is in turn fuelled by a thriving businesses, then tax avoidance is a necessary means to continue the creation of wealth and jobs in an otherwise inhospitable climate.n the wake of this, the government put forward legislation that would allow the HMRC to ‘name and shame’ tax avoiders, underlining the now common conception that tax avoidance is the mark of an immoral individual [Ref: Huffington Post].
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- Cost-benefit analysis is a framework for considering a range of benefits and costs in monetary terms. A variety of analytical tools are available to assist in quantifying and monetizing the various benefits and impacts of transportation and land development policies.
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- Cortisone Shots Side Effects. Cortisone shots deliver the medication directly to the source of inflammation by syringe. Photo Credit syringe image by NatUlrich from Fotolia.com. Cortisone is in a class of anti-inflammatory drugs called steroids.
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Accounting Cost Behavior Avoidable fixed costs. are costs that can be avoided by choosing one alternative over another. For example, if an entity decides to discontinue a product line, all costs related to the product line will not be incurred (i.e., avoided).
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- Definition: A cost object is a product produced by a company for which a separate measurement of cost is desired. A cost object can also be a project, a service, or a customer. A cost object is a management accounting or cost accounting term and is used when allocating direct and indirect costs.
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Cost-Sensitive Classification In regular classification the aim is to minimize the misclassification rate and thus all types of misclassification errors are deemed equally severe. A more general setting is cost-sensitive classification where the costs caused by different kinds of errors are not assumed to be equal and the objective is to minimize the expected costs. In case of class-dependent costs the costs depend on the true and predicted class label.
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- Definition of cost recovery: Recoupment of the purchase price of a capital or qualified asset through depreciation over a prescribed period. Dictionary Term of Day Articles Subjects Sign Up BusinessDictionary
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COST CONTROL COST CONTROL. Photo by: Ni Chun. Cost control, also known as cost management or cost containment, is a broad set of cost accounting methods and management techniques with the common goal of improving business cost-efficiency by reducing costs, or at least restricting their rate of growth.ome cost control proponents believe that such strategic cost-cutting must be planned carefully, as not all cost reduction techniques yield the same benefits.
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- From Wikipedia, the free encyclopedia. A relevant cost (also called avoidable cost or differential cost) is a cost that differs between alternatives being considered. In order for a cost to be a relevant cost it must be:1  Future. 2  Cash Flow. 3  Incremental.f, in deciding whether or not to continue construction, the $1 million sunk cost were incorrectly included in the analysis, the firm may conclude that it should abandon the project because it would be spending $1.5 million for a return of $1.2 million.
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Chapter 1: Theory of Markets and Privacy DEFINITION of 'Expense'. 1. The economic costs that a business incurs through its operations to earn revenue. In order to maximize profits, businesses must attempt to reduce expenses without also cutting into revenues. Because expenses are such an important indicator of a business's operations, there are specific accounting rules on expense recognition. 2. Money spent or costs incurred that are tax-deductible and reduce taxable income.
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- Instead, the avoided cost method is based on the assumption that debt of the taxpayer would have been repaid or reduced without regard to the taxpayer's subjective intentions or to restrictions (including legal, regulatory, contractual, or other restrictions) against repayment or use of the debt proceeds.
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Cost allocation Cost allocation is the process of identifying, aggregating, and assigning costs to cost objects. A cost object is any activity or item for which you want to separately measure costs.Examples of cost objects are a product, a research project, a customer, a sales region, and a department.Cost allocation is used for financial reporting purposes, to spread costs among departments or inventory items.xamples of cost objects are a product, a research project, a customer, a sales region, and a department. Cost allocation is used for financial reporting purposes, to spread costs among departments or inventory items.
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- With this in mind, brokers should periodically check the license status of their. salespersons and broker associates on the Department of Real Estate’s website. The. broker should also retain possession of the licenses of his/her salespersons while in the. broker's employ.
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Avoidable Cost Definition Avoidable Cost Definition: Any cost that can be eliminated (in whole or in part) by choosing one alternative over another in a decision-making situation. In managerial accounting, this term is synonymous with Relevant cost and differential cost.
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- Cost accounting. Accounting. Business portal. Cost accounting is a process of collecting, recording, classifying, analyzing, summarizing, allocating and evaluating various alternative courses of action & control of costs. Its goal is to advise the management on the most appropriate course of action based on the cost efficiency and capability.
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- cost conscious meaning, cost conscious definition | English Cobuild dictionary. cost. The form cost is used in the present tense, and is also the past tense and participle, except for meaning 4, where the form costed is used. 1 n-count The costof something is the amount of money that is needed in order to buy, do, or make it. usu sing, oft N of n.
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What is Cost Allocation? Cost allocation is the process of identifying and assigning the costs of services necessary for the operation of a business or other type of entity.nother benefit of cost allocation has to do with simply keeping track of expenses for internal planning purposes. While some expenses are indirect costs and benefit more than one area of the operation, there is still a need to allocate direct costs in a manner that is logical and accurate.
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- The amount of cost avoidance for the procurement that will be reported is automatically calculated. If performing the calculation manually, subtract the awarded amount from the average and the result will be the amount of cost avoidance. Step 4. Enter any comments in the “Comment” field. Step 5.