INCOME THEORIES Definition

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INCOME THEORIES try to identify the real profit of an organization. The difficulty here is that you need to define whose income you are measuring, and that limiting income measurements to things that can be given a price devalues goods and services that are difficult or impossible to price.

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OBJECT COST is the total cost of producing an item: direct cost (labor & material) + overhead cost = Total Object Cost.

BUDGETARY ACCOUNTING, contrary to financial accounting, looks forward: it measures the cost of planned acquisitions and the use of economic resources in the future.

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