Earnings Per Share | How to Calculate EPS?
Earnings per share (EPS) represents the proportion of a company’s net income assigned to each outstanding share of ordinary stock. Many financial professionals believe that EPS is the essential metric for determining the market price of a stock. Earnings per share that are high or rising can cause a stock’s price to rise. Inversely, declining […]
Job Order Costing versus Process Costing
Job order costing is a form of accounting that attributes individual costs directly to a completed job or service rather than to the manufacturing department. It is utilised when things are created to order or when it is simple to trace individual expenses to specific activities, presuming that the additional information adds value. Under these […]
What are the Opportunity Costs? Meaning and Examples
Opportunity costs refer to the benefits lost or profits that are sacrificed while choosing an option over another one that has been chosen. When choosing between two alternative options, only one can typically be chosen. When this occurs, you may incur opportunity costs for choosing one option over another. For instance, if you are deciding […]
What are Avoidable and Unavoidable Costs?
In business and financial planning, knowing avoidable and unavoidable costs is critical to budgeting, cost control, and profitability analysis. Avoidable costs are those that a business can avoid by making certain business decisions, like stopping a product line or contracting out services. Unavoidable costs, on the other hand, are fixed costs that a business has […]
What is Labour Efficiency Variance? Meaning and Example
Labour Efficiency Variance is also known as Labour Time Variance. It is that portion of the Labour Cost Variance which arises due to the difference between the standard labour hours specified and the actual labour hours spent. It quantifies the difference between these two measures and highlights whether a business is utilising its labour force […]