8/2/2019 Costing Answers
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efinition of 'Zero-Based Budgeting - ZBB'A method of budgeting
in which all expenses must be justified for each new period.
Zero-
based budgeting starts from a "zero base" and every function
within an organization is
analyzed for its needs and costs. Budgets are then built around
what is needed for the
upcoming period, regardless of whether the budget is higher or
lower than the previous one.
ZBB allows top-level strategic goals to be implemented into the
budgeting process by tying
them to specific functional areas of the organization, where
costs can be first grouped, then
measured against previous results and current expectations.
Investopedia explains 'Zero-Based Budgeting - ZBB'Because of its
detail-oriented nature, zero-based budgeting may be a rolling
process done
over several years, with only a few functional areas reviewed at
a time by managers or group
leadership.
Zero-based budgeting can lower costs by avoiding blanket
increases or decreases to a prior
period's budget. It is, however, a time-consuming process that
takes much longer than
traditional, cost-based budgeting. The practice also favors
areas that achieve direct revenues
or production; their contributions are more easily justified
than in departments such as client
service and research and development.
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more:http://www.investopedia.com/terms/z/zbb.asp#ixzz1rTOWNbVL
Cost CenterFiled Under Accounting ,Business
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Definition of 'Cost Center'
A department within an organization that does not directly add
to profit, but which still costs an organization money to operate.
Cost centers only co
department is likely to be one of the first targets for
downsizing because, on the surface, it has a negative impact on
profi ts.
Investopedia explains 'Cost Center'
Cost centers and profit centers are typically treated
differently within an organization. Because a cost center doesn't
produce a profit directly from it
marketing, human resources and research and development.
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more:http://www.investopedia.com/terms/c/cost-center.asp#ixzz1rTPNrGBhProfit
CenterFiled Under
http://www.investopedia.com/terms/z/zbb.asp#ixzz1rTOWNbVLhttp://www.investopedia.com/terms/z/zbb.asp#ixzz1rTOWNbVLhttp://www.investopedia.com/terms/z/zbb.asp#ixzz1rTOWNbVLhttp://www.investopedia.com/tags/Accountinghttp://www.investopedia.com/tags/Accountinghttp://www.investopedia.com/tags/Accountinghttp://www.investopedia.com/tags/Businesshttp://www.investopedia.com/tags/Businesshttp://www.investopedia.com/tags/Businesshttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/terms/c/cost-center.asp#ixzz1rTPNrGBhhttp://www.investopedia.com/terms/c/cost-center.asp#ixzz1rTPNrGBhhttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/terms/c/cost-center.asp#ixzz1rTPNrGBhhttp://www.investopedia.com/contact.aspx?type=TermSuggestionhttp://www.investopedia.com/dictionary/TermDefinitionPrintable.aspx?url=/terms/c/cost-center.asphttp://www.investopedia.com/shareemail.aspx?subject=Cost+Center&url=http://www.investopedia.com/terms/c/cost-center.asphttp://www.investopedia.com/tags/Businesshttp://www.investopedia.com/tags/Accountinghttp://www.investopedia.com/terms/z/zbb.asp#ixzz1rTOWNbVL
8/2/2019 Costing Answers
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Definition of 'Profit Center'
The branch or division of a company that creates profits
individually and separately from the main organization.
Investopedia explains 'Profit Center'
The profit center's revenues and expenses are held separate from
the main company's in order to determine their
profitability.
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more:http://www.investopedia.com/terms/p/profitcentre.asp#ixzz1rTPzHRMainvestment
center
DefinitionDepartment or an area ofresponsibility, where a
manager controls revenues and associated costs, assets, and
liabilities. His or
her performance is assessed largely on the basis ofreturn on
investment (ROI) achieved.
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more:http://www.businessdictionary.com/definition/investment-center.html#ixzz1rTQV2tM0
Transfer PriceFiled Under Accounting
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Definition of 'Transfer Price'
The price at which divisions of a company transact with each
other. Transactions may include the trade of supplies or labor
between departments. T
Also known as "transfer cost".
Investopedia explains 'Transfer Price'
In managerial accounting, when different divisions of a
multi-entity company are in charge of their own profits, they are
also responsible for their o
costs. Transfer prices tend not to differ much from the price in
the market because one of the entities in such a transaction will
lose out: they will eit
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