Cost analysis is the basic tool of cost study. It is the primary mode of study which helps in carrying out other descriptive and analytical methods of cost studies. Moreover, data derived from cost analyses can be further used for accounting, budgeting, and performance measurement procedures. A sound and convincing presentation of a budget is generally based on underlying cost analysis of different alternatives.
Before starting cost analysis it is essential to establish the analytical framework. The framework consists of: identification of the nature of the problem; clarification of the alternatives to be considered for analysis; identification of the primary and secondary audiences for the analysis; and selection of the appropriate method of the analysis.
Cost effectiveness analysis refers to the study of the alternatives in relation to their cost and effects to achieve certain goal or outcome. The focus is, therefore, on the achievement of certain objectives or goals. The cost effective solution is the one which provides maximum output with the minimum cost possible. Cost effectiveness is generally confused with cost efficiency study. The basic difference between the two is that while cost effectiveness is output oriented, cost efficiency is input oriented. In cost effective study the goal is to maximise output at a given level of cost which may not be necessarily the minimum cost solution. The aim of cost efficiency, on the other hand, is to minimize cost at a given level of output which perhaps may not be the most effective solution in terms of output or performance.
Describe different approaches of Cost Analysis. Differentiate Cost Effective Analysis from Cost Benefit Analysis
What is Cost Adequacy Investigation?
Cost viability examination is utilized as an assessment
device where results created by an undertaking are not estimated in financial
terms. This approach is broadly utilized in wellbeing and drug enterprises
where the advantages are subjective in nature as opposed to quantitative. For
example, in wellbeing research, the significant measuring sticks for progress
models are angles, for example, the sicknesses forestalled and long stretches
of life acquired where the actions will be cost per ailment forestalled and
cost each time of life acquired, separately.
The basic idea of cost viability examination is that an
undertaking or a venture, despite the fact that it could be communicated in
money related terms, ought not be evaluated for its financial worth alone and
subjective variables ought to likewise be thought of. A 'cost viability
proportion' can be determined according to underneath.
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Discuss in brief different methods of financial estimation
Describe different approaches of Cost Analysis. Differentiate
Cost Effective Analysis from Cost Benefit Analysis
What is Money saving advantage Investigation?
Likewise alluded to as 'help cost examination', money saving
advantage investigation is a precise cycle by which business choices are broke
down. The advantages of a given circumstance or business-related activity are
added, and afterward the expenses related with making that move are deducted.
Money saving advantage examination is a split the difference between the
increases of expenses and advantages to carry out a business choice. The
dynamic models will be to continue with the venture if the advantages overweigh
costs. Money saving advantage examination does this by measuring the expenses
of a venture in financial terms and contrasting them and the advantages,
likewise communicated in money related figures.
All immediate and aberrant expenses, as well as repeating and
nonrecurring costs, ought to be thought of and mind ought to be taken to not
misjudge expenses or misjudge benefits. Furthermore, the accompanying expenses
ought to be considered too.
Opportunity cost of the task (potential advantage predestined
by putting finances in an elective speculation)
Cost of not doing the venture
Possible expenses of venture disappointment
Describe different approaches of Cost Analysis. Differentiate
Cost Effective Analysis from Cost Benefit Analysis
Notwithstanding, it ought to be noticed that money saving
advantage examination is a less difficult speculation investigation device and
is just appropriate for little to medium scale ventures that range throughout a
restricted time span. Because of intricacy and vulnerability of incomes, this
can't be considered as a fitting choice device for enormous scope extends that
range throughout a lengthy time span.
Outline - Cost Adequacy Examination versus Money saving advantage Investigation
The contrast between cost viability examination and money
saving advantage examination for the most part relies upon whether the center
is given to the worth of result (in cost adequacy examination) or the financial
worth (in money saving advantage examination) of a task. Money saving advantage
examination is generally utilized in business associations because of its
inborn business nature while administration related association can broadly
profit from the utilization of cost adequacy investigation.
Reference:
1."How to Recognize Money saving advantage Examination
and Savvy Investigation." Chron.com. 01 Feb. 2013. Web. 21 Blemish. 2017.
2."Interpretation of Cost-Viability
Investigations." Diary of General Inner Medication. Blackwell Science Inc,
Oct. 1998. Web. 21 Blemish. 2017.
Describe different approaches of Cost Analysis. Differentiate
Cost Effective Analysis from Cost Benefit Analysis
3."Cost-Advantage Examination." Investopedia. N.p.,
22 May 2015. Web. 21 Blemish. 2017.
4."Performing a Money saving advantage
Examination." Fakers. N.p., n.d. Web. 21 Blemish. 2017.
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Discuss in brief different methods of financial estimation
IMPORTANT QUESTIONS:-
1) Explain additive accounting.
2) Explain the cost-benefit analysis from a gender perspective by using a case study.
3) Distinguish Ixmt cost, as usid in economics and education in six sentences.
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