COST ALLOCATION is the assignment to each of several particular cost-centers of an equitable proportion of the costs of activities that serve all of them, i.e. shared cost pools.
GROSS PROFIT METHOD is an inventory estimate based on gross margin.
HYPOTHESIS is a proposition about cause and effect relationships. A hypothesis involves anticipating an effect, and a means of observing whether the anticipation is correct. A company’s strategy is based on a hypothesis – “If we do A, then B will result.” For example, a strategy map for a Balanced Scorecard explains the hypothesis behind an organization’s strategy.
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