The data are then used in the model as the starting point for a forecast. Commonly, the set of equations used to predict the physics and dynamics of the atmosphere are called primitive equations. These equations are initialized from the analysis data and rates of change are determined. The rates of change predict the state … Continue reading “The 6 Steps in Business Forecasting”

Using the per-hour overhead rate, overhead cost would be applied to each item based on the number of direct labor hours used in producing the good. The traditional method of cost accounting refers to the allocation of manufacturing overhead costs to the products manufactured. If a manufacturer wants to know the true cost to produce … Continue reading “What is the traditional method used in cost accounting?”

Direct materials There are two way to calculate COGS, according to Accounting Coach. Calculating the finished goods inventory for a manufacturing company requires the use of simple mathematical formulas. COGS count as a business expense and affect how much profit a company makes on its products, according to The Balance. When a manufacturer sells finished … Continue reading “What Is Cost of Goods Sold”

There are a number of financial ratios that can be reviewed to gauge a company’s overall financial health and to make a determination of the likelihood of the company continuing as a viable business. Standalone numbers such as total debt or net profit are less meaningful than financial ratios that connect and compare the various … Continue reading “Net Financial Position”

START YOUR BUSINESS The calculation of the unit cost of production is a breakeven point. This cost forms the base level price that a company uses when determining its market price value. Overall a unit must be sold for more than its unit cost to generate a profit. For example, a company produces 1,000 units … Continue reading “What is net price?”

While the payments in an ordinary annuity can be made as frequently as every week, in practice, they are generally made monthly, quarterly, semi-annually, or annually. The opposite of an ordinary annuity is an annuity due, in which payments are made at the beginning of each period. Explaining Types of Fixed Annuities The payments you … Continue reading “Calculating Present and Future Value of Annuities”

The cost of setting up will be the same whether the printer produces one copy or 10,000. If the set-up cost is $55 and the printer produces 500 copies, each copy will carry 11 cents worth of the setup cost-;the fixed costs. For example, a company may pay a sales person a monthly salary (a … Continue reading “Accounts Expenses”

Long-term liabilities are debts and other non-debt financial obligations, which are due after a period of at least one year from the date of the balance sheet. Current liabilities are the company’s liabilities that will come due, or must be paid, within one year. This includes both shorter-term borrowings, such as accounts payables, along with … Continue reading “Equity Definition”

If the payment was made on June 1 for a future month (for example, July) the debit would go to the asset account Prepaid Rent. Office supplies are typically prepaid expenses. Even though you pay for them when you buy them, you use them up gradually. When you use an accrual accounting system, the month … Continue reading “Tax Guide For Photographers”

The discount rate for calculating the present value of the cash flows is the bond’s yield. Duration measures how long it takes, in years, for an investor to be repaid the bond’s price by the bond’s total cash flows. At the same time, duration is a measure of sensitivity of a bond’s or fixed income … Continue reading “The Relationship Between Interest Rates and Bond Prices”