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  3. has an extensive use of arbitrary cost allocations

has an extensive use of arbitrary cost allocations and low level of accurecy Cost center...

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Accounting

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has an extensive use of arbitrary cost allocations and low level of accurecy Cost center Allocation bases Arbitrary allocations Simplistic system o Can not be useful as it is and need to be analyzed to be useful Financial Accounting O Data O Management Accounting Information Product life cycle O Value chain analysis o .Used by external parties outside the organization. Produced annually Management Accounting Data Product life cycle O Information Financial Accounting Value chain analysis represents the proportion of each SAR of sales that will cover the fixed cost and provide for profits Break-Even Point o Profit - Volume Ratio Relevant Costs Depreciation Irrelevant Costs O Limiting Factors Margin of safety o Qualitative Factors A cost that measures the amount of money that is lost or sacrificed when the choice of one course of action requires that an alternative course of action be given up Indirect costs Product Costs o Direct Costs Opportunity Cost Period Costs Sunk Cost Cost Object Relevant Costs

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