About 'accountants small business'|Accountants in Canada: Creating a Business Instead of a Job

About 'accountants small business'|Accountants in Canada: Creating a Business Instead of a Job

Ｉｎ               ｏｒｄｅｒ               ｔｏ               ｍａｉｎｔａｉｎ               ｔｈｅ               ｃｏｍｐｅｔｉｔｉｖｅ               ｖｉｔａｌｉｔｙ               ｏｆ               ｙｏｕｒ               ｓｍａｌｌ               ｂｕｓｉｎｅｓｓ               ｉｔ               ｉｓ               ｆｕｎｄａｍｅｎｔａｌ               ｔｈａｔ               ｙｏｕ               ａｒｅ               ａｗａｒｅ               ｏｆ               ａｌｌ               ｙｏｕｒ               ｃｏｓｔｓ,               ｔｈａｔ               ｙｏｕ               ｃｏｎｔｒｏｌ               ｔｈｅｍ,               ａｎｄ               ｔｈａｔ               ｙｏｕ               ｋｎｏｗ               ｈｏｗ               ｔｈｅｙ               ｃｏｍｐａｒｅ               ｗｉｔｈ               ｔｈｏｓｅ               ｏｆ               ｃｏｍｐｅｔｉｔｏｒｓ               ｗｈｏ               ｐｒｏｄｕｃｔ               ｔｈｅ               ｓａｍｅ               ｐｒｏｄｕｃｔ               ｏｒ               ｐｒｏｖｉｄｅ               ｔｈｅ               ｓａｍｅ               ｓｅｒｖｉｃｅ. Ｃｏｓｔｓ               ａｒｅ               ａ               ｍｅａｓｕｒｅ               ｏｆ               ｔｈｅ               ｒｅｓｏｕｒｃｅｓ,               ｏｒ               ｉｎｐｕｔ               ｎｅｅｄｅｄ               ｔｏ               ｐｒｏｄｕｃｅ               ａ               ｐｒｏｄｕｃｔ               ｏｒ               ｓｅｒｖｉｃｅ               ａｎｄ               ｂｒｉｎｇ               ｉｔ               ｔｏ               ｔｈｅ               ｃｕｓｔｏｍｅｒｓ               ｏｒ               ｃｌｉｅｎｔｓ. Ｉｔ               ｉｓ               ｉｍｐｏｒｔａｎｔ               ｔｏ               ｃｏｎｓｉｄｅｒ               ａｌｌ               ｃｏｓｔｓ,               ｆｒｏｍ               ｔｈｅ               ｄｅｖｅｌｏｐｍｅｎｔ               ｏｆ               ａ               ｎｅｗ               ｐｒｏｄｕｃｔ               ｏｒ               ｓｅｒｖｉｃｅ               ｔｈｒｏｕｇｈ               ｔｈｅ               ｓｅｒｖｉｃｅ               ａｆｔｅｒ               ｔｈｅ               ｓａｌｅ. Ｂｙ               ｕｎｄｅｒｓｔａｎｄｉｎｇ               ａｌｌ               ｔｈｅ               ｃｏｓｔｓ,               ｙｏｕ               ｃａｎ               ｄｅｔｅｒｍｉｎｅ               ｔｈｅ               ｐｒｉｃｅ               ｙｏｕ               ｎｅｅｄ               ｔｏ               ｃｈａｒｇｅ               ｆｏｒ               ｔｈｅ               ｐｒｏｄｕｃｔ               ｏｒ               ｓｅｒｖｉｃｅ,               ｉｎ               ｏｒｄｅｒ               ｔｏ               ｃｏｖｅｒ               ａｌｌ               ｙｏｕｒ               ｃｏｓｔｓ               ａｎｄ               ｇｅｎｅｒａｔｅ               ａ               ｒｅａｓｏｎａｂｌｅ               ｍａｒｇｉｎ               ｏｒ               ｐｒｏｆｉｔ               ｆｏｒ               ｙｏｕｒ               ｃｏｍｐａｎｙ.                Ｉｎ               ｏｖｅｒａｌｌ               ｔｅｒｍｓ,               ｎｅｔ               ｏｐｅｒａｔｉｎｇ               ｉｎｃｏｍｅ               ｉｓ               ｃａｌｃｕｌａｔｅｄ               ａｓ               ｆｏｌｌｏｗｓ:               Ｓａｌｅｓ               ｒｅｖｅｎｕｅｓ               ｍｉｎｕｓ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｓａｌｅｓ               ｅｑｕａｌｓ               ｇｒｏｓｓ               ｍａｒｇｉｎ. Ｔｈｅ               ｇｒｏｓｓ               ｍａｒｇｉｎ               ｍｉｎｕｓ               ｓｅｌｌｉｎｇ               ａｎｄ               ａｄｍｉｎｉｓｔｒａｔｉｖｅ               ｅｘｐｅｎｓｅｓ               ｅｑｕａｌｓ               ｎｅｔ               ｏｐｅｒａｔｉｎｇ               ｉｎｃｏｍｅ.                Ｆｒｏｍ               ｏｐｅｒａｔｉｎｇ               ｉｎｃｏｍｅ               ｙｏｕ               ｓｕｂｔｒａｃｔ               ｏｔｈｅｒ               ｇｅｎｅｒａｌ               ｅｘｐｅｎｓｅｓ               ｔｈａｔ               ａｒｅ               ｎｏｔ               ｄｉｒｅｃｔｌｙ               ａｌｌｏｃａｂｌｅ               ｔｏ               ｓａｌｅｓ               ｂｕｔ               ｔｈａｔ               ｎｅｖｅｒｔｈｅｌｅｓｓ               ｆｏｒｍ               ｐａｒｔ               ｏｆ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｒｕｎｎｉｎｇ               ｙｏｕｒ               ｂｕｓｉｎｅｓｓ. Ｔｈｅｓｅ               ｅｘｐｅｎｓｅｓ               ｉｎｃｌｕｄｅ               ｉｎｔｅｒｅｓｔ               ａｎｄ               ｂａｎｋ               ｃｈａｒｇｅｓ,               ｔａｘｅｓ,               ａｎｄ               ｎｏｎ-ｏｐｅｒａｔｉｎｇ               ｌｏｓｓｅｓ.                Ｃｏｓｔ               ｏｆ               Ｓａｌｅｓ                Ｃｏｓｔ               ｏｆ               ｓａｌｅｓ               ｃｏｎｓｉｓｔｓ               ｏｆ               ａｌｌ               ｃｏｓｔｓ               ｔｈａｔ               ａｒｅ               ｃｌｅａｒｌｙ               ａｌｌｏｃａｂｌｅ               ｔｏ               ｔｈｅ               ｐｒｏｄｕｃｔｓ               ｓｏｌｄ               ｏｒ               ｔｈｅ               ｓｅｒｖｉｃｅｓ               ｒｅｎｄｅｒｅｄ. Ｓｏｍｅ               ｏｆ               ｔｈｅｓｅ               ｃｏｓｔｓ               ａｒｅ               ｅａｓｉｌｙ               ｉｄｅｎｔｉｆｉｅｄ,               ｓｕｃｈ               ａｓ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｍａｔｅｒｉａｌｓ               ａｎｄ               ｌａｂｏｒ               ｔｈａｔ               ｅｎｔｅｒ               ｄｉｒｅｃｔｌｙ               ｉｎｔｏ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ａ               ｐｒｏｄｕｃｔ. Ｏｔｈｅｒ               ｃｏｓｔｓ               ｍａｙ               ｂｅ               ｍｏｒｅ               ｄｉｆｆｉｃｕｌｔ               ｔｏ               ａｌｌｏｃａｔｅ               ｄｉｒｅｃｔｌｙ               ｔｏ               ａ               ｐａｒｔｉｃｕｌａｒ               ｐｒｏｄｕｃｔ               ｏｒ               ｓｅｒｖｉｃｅ,               ｂｕｔ               ｉｔ               ｉｓ               ｉｍｐｏｒｔａｎｔ               ｔｏ               ｉｄｅｎｔｉｆｙ               ｔｈｅｍ               ａｓ               ｐｒｅｃｉｓｅｌｙ               ａｓ               ｐｏｓｓｉｂｌｅ.                Ｄｉｒｅｃｔ               ａｎｄ               Ｉｎｄｉｒｅｃｔ               Ｃｏｓｔｓ                Ｄｉｒｅｃｔ               ｃｏｓｔｓ               ａｒｅ               ｔｈｏｓｅ               ｔｈａｔ               ｃａｎ               ｂｅ               ａｌｌｏｃａｔｅｄ               ｄｉｒｅｃｔｌｙ               ｔｏ               ｔｈｅ               ｐｒｏｄｕｃｔ               ｏｒ               ｓｅｒｖｉｃｅ.                Ｉｎ               ａ               ｍｅｒｃｈａｎｄｉｓｉｎｇ               ｃｏｍｐａｎｙ               ｔｈａｔ               ｂｕｙｓ               ａｒｔｉｃｌｅｓ               ｆｏｒ               ｒｅｓａｌｅ,               ｄｉｒｅｃｔ               ｃｏｓｔｓ               ｉｎｃｌｕｄｅ               ｔｈｅ               ａｍｏｕｎｔ               ｐａｉｄ               ｆｏｒ               ｔｈｅ               ｍｅｒｃｈａｎｄｉｓｅ,               ｔｈｅ               ｓｈｉｐｐｉｎｇ               ａｎｄ               ｔｒａｎｓｐｏｒｔａｔｉｏｎ               ｃｏｓｔｓ,               ａｎｄ               ｓｔｏｒａｇｅ               ｏｒ               ｗａｒｅｈｏｕｓｉｎｇ               ｃｏｓｔｓ. Ｗｈｅｎ               ｙｏｕ               ｂｕｙ               ａｎｄ               ｓｅｌｌ               ｍｏｒｅ               ｔｈａｎ               ｏｎｅ               ｔｙｐｅ               ｏｆ               ｐｒｏｄｕｃｔ,               ｉｔ               ｉｓ               ｉｍｐｏｒｔａｎｔ               ｔｏ               ａｌｌｏｃａｔｅ               ｔｈｅ               ｃｏｓｔｓ               ｔｈａｔ               ｃｏｒｒｅｓｐｏｎｄ               ｔｏ               ｍｏｒｅ               ｔｈａｎ               ｏｎｅ               ｔｙｐｅ               ｏｆ               ｐｒｏｄｕｃｔ,               ｆｏｒ               ｅｘａｍｐｌｅ               ｔｈｅ               ｃｏｓｔｓ               ｏｆ               ｓｈｉｐｐｉｎｇ               ａｎ               ｏｒｄｅｒ               ｔｈａｔ               ｉｎｃｌｕｄｅｓ               ｓｅｖｅｒａｌ               ｔｙｐｅｓ               ｏｆ               ｐｒｏｄｕｃｔｓ,               ａｎｄ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｗａｒｅｈｏｕｓｉｎｇ               ｖａｒｉｏｕｓ               ｔｙｐｅｓ               ｏｆ               ｐｒｏｄｕｃｔｓ.                Ｉｎ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ｃｏｍｐａｎｉｅｓ,               ｄｉｒｅｃｔ               ｃｏｓｔｓ               ｉｎｃｌｕｄｅ               ｒａｗ               ｍａｔｅｒｉａｌｓ,               ｓｕｐｐｌｉｅｓ,               ａｎｄ               ｌａｂｏｒ. Ｗｈａｔ               ｉｓ               ｉｍｐｏｒｔａｎｔ               ｉｓ               ｔｏ               ｂｅ               ａｂｌｅ               ｔｏ               ｍｅａｓｕｒｅ               ｔｈｅ               ｃｏｓｔ               ａｎｄ               ａｓｓｉｇｎ               ｉｔ               ｔｏ               ｓｐｅｃｉｆｉｃ               ｐｒｏｄｕｃｔｓ. Ｉｎ               ｔｈｉｓ               ｔｙｐｅ               ｏｆ               ｂｕｓｉｎｅｓｓ,               ｃｏｓｔ               ａｃｃｏｕｎｔｉｎｇ               ｔａｋｅｓ               ｏｎ               ａｄｄｅｄ               ｉｍｐｏｒｔａｎｃｅ,               ｉｎ               ｏｒｄｅｒ               ｔｏ               ｂｅ               ａｂｌｅ               ｔｏ               ｃａｌｃｕｌａｔｅ               ａ               ｕｎｉｔ               ｃｏｓｔ               ｔｈａｔ               ｃａｎ               ｂｅ               ｕｓｅｄ               ｔｏ               ｓｅｔ               ｔｈｅ               ｐｒｏｐｅｒ               ｓｅｌｌｉｎｇ               ｐｒｉｃｅ               ａｎｄ               ｃａｌｃｕｌａｔｅ               ｔｈｅ               ｍａｒｇｉｎ               ｅａｒｎｅｄ               ｏｎ               ｅａｃｈ               ｔｙｐｅ               ｏｆ               ｐｒｏｄｕｃｔ.                Ｉｎ               ａ               ｓｅｒｖｉｃｅｓ               ｂｕｓｉｎｅｓｓ,               ｄｉｒｅｃｔ               ｃｏｓｔｓ               ａｒｅ               ｔｈｅ               ｈｏｕｒｓ               ｅａｃｈ               ｐｅｒｓｏｎ               ｓｐｅｎｄｓ               ｐｒｏｖｉｄｉｎｇ               ｔｈｅ               ｓｅｒｖｉｃｅ,               ｍｕｌｔｉｐｌｉｅｄ               ｂｙ               ｔｈｅ               ｃｏｍｐｅｎｓａｔｉｏｎ               ｅａｃｈ               ｐｅｒｓｏｎ               ｒｅｃｅｉｖｅｓ. Ｉｔ               ｉｓ               ｉｍｐｏｒｔａｎｔ               ｔｏ               ｃｏｎｓｉｄｅｒ               ａｌｌ               ｃｏｓｔｓ,               ｉｎｃｌｕｄｉｎｇ               ｓａｌａｒｉｅｓ               ａｎｄ               ｗａｇｅｓ,               ｂｏｎｕｓｅｓ               ａｎｄ               ａｗａｒｄｓ,               ａｎｄ               ｂｅｎｅｆｉｔｓ               ｗｈｅｎ               ｃａｌｃｕｌａｔｉｎｇ               ｔｈｅ               ｈｏｕｒｌｙ               ｃｏｓｔ. Ｔｈｅｒｅ               ｃｏｕｌｄ               ｂｅ               ｍａｔｅｒｉａｌｓ               ｔｈａｔ               ａｒｅ               ｕｓｅｄ               ｉｎ               ｐｒｏｖｉｄｉｎｇ               ｔｈｅ               ｓｅｒｖｉｃｅ               ａｎｄ               ｔｈｅｓｅ               ａｌｓｏ               ｆｏｒｍ               ｐａｒｔ               ｏｆ               ｔｈｅ               ｄｉｒｅｃｔ               ｃｏｓｔ. Ａｎｄ               ｗｈｅｎ               ｔｈｅ               ｓｅｒｖｉｃｅｓ               ｏｆ               ｃｏｎｔｒａｃｔｏｒｓ               ｏｒ               ｏｔｈｅｒ               ｔｈｉｒｄ               ｐａｒｔｉｅｓ               ａｒｅ               ｕｓｅｄ,               ｔｈｅ               ａｍｏｕｎｔ               ｐａｉｄ               ｆｏｒ               ｔｈｅｉｒ               ｓｅｒｖｉｃｅｓ               ｉｓ               ａｌｓｏ               ｉｎｃｌｕｄｅｄ               ｉｎ               ｔｈｅ               ｄｉｒｅｃｔ               ｃｏｓｔ.                Ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ａｒｅ               ｔｈｏｓｅ               ｔｈａｔ               ｃａｎｎｏｔ               ｂｅ               ａｌｌｏｃａｔｅｄ               ｔｏ               ａ               ｓｐｅｃｉｆｉｃ               ｐｒｏｄｕｃｔ               ｏｒ               ｓｅｒｖｉｃｅ               ｂｕｔ               ｔｈａｔ               ｎｅｖｅｒｔｈｅｌｅｓｓ               ｆｏｒｍ               ｐａｒｔ               ｏｆ               ｏｐｅｒａｔｉｎｇ               ｃｏｓｔｓ. Ｔｈｅｓｅ               ｃｏｓｔｓ               ｃａｎ               ｉｎｃｌｕｄｅ               ｕｔｉｌｉｔｉｅｓ               ｓｕｃｈ               ａｓ               ｗａｔｅｒ,               ｇａｓ,               ａｎｄ               ｅｌｅｃｔｒｉｃｉｔｙ,               ａｎｄ               ｉｎｓｕｒａｎｃｅ. Ｔｈｅｙ               ａｌｓｏ               ｉｎｃｌｕｄｅ               ｒｅｐａｉｒｓ               ａｎｄ               ｍａｉｎｔｅｎａｎｃｅ               ｏｆ               ｍａｃｈｉｎｅｒｙ               ａｎｄ               ｅｑｕｉｐｍｅｎｔ,               ａｎｄ               ｄｅｐｒｅｃｉａｔｉｏｎ               ａｎｄ               ａｍｏｒｔｉｚａｔｉｏｎ.                Ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ｃａｎ               ｂｅ               ａｌｌｏｃａｔｅｄ               ｔｏ               ｐｒｏｄｕｃｔｓ               ａｎｄ               ｓｅｒｖｉｃｅｓ               ｂａｓｅｄ               ｏｎ               ａ               ｐｒｅｄｅｔｅｒｍｉｎｅｄ               ｍｅｔｈｏｄ,               ｗｈｉｃｈ               ｍａｙ               ｂｅ               ｏｎ               ａ               ｐｒｏｒａｔｅｄ               ｂａｓｉｓ.                Ｉｎ               ａ               ｍｅｒｃｈａｎｄｉｓｉｎｇ               ｃｏｍｐａｎｙ               ｙｏｕ               ｃｏｕｌｄ               ｄｉｖｉｄｅ               ｔｈｅ               ｐｕｒｃｈａｓｅ               ｃｏｓｔ               ｏｆ               ｔｈｅ               ｍｅｒｃｈａｎｄｉｓｅ               ｂｙ               ｔｈｅ               ｎｕｍｂｅｒ               ｏｆ               ｉｔｅｍｓ               ｐｕｒｃｈａｓｅｄ               ｄｕｒｉｎｇ               ａ               ｍｏｎｔｈ. Ｔｈｅｎ               ｙｏｕ               ｃａｎ               ａｌｌｏｃａｔｅ               ｐａｒｔ               ｏｆ               ｔｈｅ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ｆｏｒ               ｔｈｅ               ｍｏｎｔｈ               ｏｎ               ａ               ｐｒｏｒａｔｅｄ               ｂａｓｉｓ               ｔｏ               ｔｈｅ               ｉｔｅｍｓ               ｓｏｌｄ               ｄｕｒｉｎｇ               ｔｈｅ               ｍｏｎｔｈ               ｔｏ               ｄｅｔｅｒｍｉｎｅ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｓａｌｅｓ. Ｔｈｅ               ｒｅｍａｉｎｉｎｇ               ｐｏｒｔｉｏｎ               ｏｆ               ｔｈｅ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ｗｏｕｌｄ               ｒｅｍａｉｎ               ａｓ               ｐａｒｔ               ｏｆ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｉｎｖｅｎｔｏｒｙ,               ｆｏｒ               ｔｈｅ               ｉｔｅｍｓ               ｐｕｒｃｈａｓｅｄ               ｂｕｔ               ｎｏｔ               ｓｏｌｄ               ｄｕｒｉｎｇ               ｔｈｅ               ｍｏｎｔｈ.                Ｉｎ               ａ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ｃｏｍｐａｎｙ,               ｙｏｕ               ｃｏｕｌｄ               ａｌｌｏｃａｔｅ               ｔｈｅ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ｔｈａｔ               ａｒｅ               ｍｅａｓｕｒｅｄ               ｂａｓｅｄ               ｏｎ               ｔｈｅ               ｐａｓｓａｇｅ               ｏｆ               ｔｉｍｅ,               ｓｕｃｈ               ａｓ               ｒｅｎｔ,               ｉｎｓｕｒａｎｃｅ,               ｔｈｅ               ｂａｓｅ               ｃｏｓｔ               ｏｆ               ｕｔｉｌｉｔｉｅｓ,               ａｎｄ               ｄｅｐｒｅｃｉａｔｉｏｎ,               ｂａｓｅｄ               ｏｎ               ｔｈｅ               ｎｕｍｂｅｒ               ｏｆ               ｐｒｏｄｕｃｔｓ               ｍａｎｕｆａｃｔｕｒｅｄ               ｄｕｒｉｎｇ               ｔｈｅ               ｓａｍｅ               ｐｅｒｉｏｄ,               ｓｕｃｈ               ａｓ               ａ               ｍｏｎｔｈ. Ｔｈｅｓｅ               ａｌｌｏｃａｔｅｄ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ｗｏｕｌｄ               ｔｈｅｎ               ｆｏｒｍ               ｐａｒｔ               ｏｆ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｔｈｅ               ｐｒｏｄｕｃｔ. Ｔｈｅ               ｃｏｓｔ               ａｓｓｏｃｉａｔｅｄ               ｗｉｔｈ               ｐｒｏｄｕｃｔｓ               ｓｏｌｄ               ｄｕｒｉｎｇ               ｔｈｅ               ｍｏｎｔｈ               ｗｏｕｌｄ               ｂｅ               ｂｏｏｋｅｄ               ａｓ               ｃｏｓｔ               ｏｆ               ｓａｌｅｓ,               ａｎｄ               ｔｈｅ               ｃｏｓｔ               ａｓｓｏｃｉａｔｅｄ               ｗｉｔｈ               ｐｒｏｄｕｃｔｓ               ｍａｎｕｆａｃｔｕｒｅｄ               ｂｕｔ               ｎｏｔ               ｓｏｌｄ               ｄｕｒｉｎｇ               ｔｈｅ               ｍｏｎｔｈ               ｗｏｕｌｄ               ｂｅ               ｂｏｏｋｅｄ               ａｓ               ｐａｒｔ               ｏｆ               ｔｈｅ               ｉｎｖｅｎｔｏｒｙ               ｃｏｓｔ.                Ｉｎ               ａ               ｓｅｒｖｉｃｅｓ               ｂｕｓｉｎｅｓｓ,               ｔｈｅ               ｔｏｔａｌ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ｉｎｃｕｒｒｅｄ               ｄｕｒｉｎｇ               ｔｈｅ               ｍｏｎｔｈ               ｃｏｕｌｄ               ｂｅ               ｄｉｖｉｄｅｄ               ｂｙ               ｔｈｅ               ｔｏｔａｌ               ｎｕｍｂｅｒ               ｏｆ               ｈｏｕｒｓ               ｗｏｒｋｅｄ               ｄｕｒｉｎｇ               ｔｈｅ               ｍｏｎｔｈ. Ｔｈｅｓｅ               ｃｏｓｔｓ               ｗｏｕｌｄ               ｔｈｅｎ               ｂｅ               ｐｒｏｒａｔｅｄ               ａｎｄ               ａｌｌｏｃａｔｅｄ               ｔｏ               ｃｏｓｔ               ｏｆ               ｓａｌｅｓ               ｂａｓｅｄ               ｏｎ               ｔｈｅ               ｐｒｏｐｏｒｔｉｏｎ               ｏｆ               ｈｏｕｒｓ               ｗｏｒｋｅｄ               ｄｕｒｉｎｇ               ｔｈｅ               ｍｏｎｔｈ               ｔｈａｔ               ｃａｎ               ｂｅ               ｂｉｌｌｅｄ               ｔｏ               ｃｌｉｅｎｔｓ. Ｔｈｅ               ｐｏｒｔｉｏｎ               ｏｆ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ａｌｌｏｃａｔｅｄ               ｔｏ               ｈｏｕｒｓ               ｔｈａｔ               ｃａｎｎｏｔ               ｂｅ               ｂｉｌｌｅｄ               ｗｏｕｌｄ               ｃｏｎｓｔｉｔｕｔｅ               ａｎ               ａｄｍｉｎｉｓｔｒａｔｉｖｅ               ｏｒ               ｇｅｎｅｒａｌ               ｅｘｐｅｎｓｅ.                Ｔｈｅｒｅ               ａｒｅ               ｍｏｒｅ               ｐｒｅｃｉｓｅ               ｗａｙｓ               ｔｏ               ａｌｌｏｃａｔｅ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ. Ｆｏｒ               ｅｘａｍｐｌｅ,               ｉｎ               ａ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ｃｏｍｐａｎｙ               ｗｈｅｒｅ               ｍａｃｈｉｎｅｒｙ               ｉｓ               ｕｓｅｄ               ｔｏ               ｍａｎｕｆａｃｔｕｒｅ               ａ               ｐｒｏｄｕｃｔ,               ｉｆ               ｙｏｕ               ｃａｎ               ｄｅｔｅｒｍｉｎｅ               ｈｏｗ               ｍｕｃｈ               ｍａｃｈｉｎｅ               ｔｉｍｅ               ｉｓ               ｒｅｑｕｉｒｅｄ               ｔｏ               ｐｒｏｄｕｃｅ               ｏｎｅ               ｕｎｉｔ,               ｏｒ               ａ               ｃｅｒｔａｉｎ               ｑｕａｎｔｉｔｙ               ｏｆ               ｕｎｉｔｓ,               ａｎｄ               ｙｏｕ               ｃａｎ               ｄｅｔｅｒｍｉｎｅ               ａｌｌ               ｔｈｅ               ｃｏｓｔｓ               ｉｎｖｏｌｖｅｄ               ｉｎ               ｏｐｅｒａｔｉｎｇ               ｔｈｅ               ｍａｃｈｉｎｅｒｙ               (ｅｌｅｃｔｒｉｃｉｔｙ,               ｆｕｅｌ,               ｌｕｂｒｉｃａｎｔｓ,               ｗａｔｅｒ,               ｒｅｐａｉｒｓ,               ｍａｉｎｔｅｎａｎｃｅ,               ａｎｄ               ｄｅｐｒｅｃｉａｔｉｏｎ)               ｙｏｕ               ｃａｎ               ｃａｌｃｕｌａｔｅ               ａｎ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔ               ｐｅｒ               ｕｎｉｔ. Ｔｈｉｓ               ｉｎｖｏｌｖｅｓ               ｍｏｒｅ               ｅｆｆｏｒｔ               ｉｎ               ａｃｃｏｕｎｔｉｎｇ               ｆｏｒ               ｔｈｅ               ｃｏｓｔｓ,               ｂｕｔ               ｗｈｅｎ               ｔｈｅｓｅ               ｃｏｓｔｓ               ａｒｅ               ｓｉｇｎｉｆｉｃａｎｔ,               ｉｔ               ｍａｙ               ｂｅ               ｂｅｎｅｆｉｃｉａｌ               ａｎｄ               ｅｖｅｎ               ｎｅｃｅｓｓａｒｙ.                Ｄｅｐｒｅｃｉａｔｉｏｎ                Ｄｅｐｒｅｃｉａｔｉｏｎ               ｉｓ               ｔｈｅ               ｍｅｔｈｏｄ               ｕｓｅｄ               ｔｏ               ｓｐｒｅａｄ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｉｎｖｅｓｔｍｅｎｔｓ               ｉｎ               ｂｕｉｌｄｉｎｇｓ,               ｉｎｓｔａｌｌａｔｉｏｎｓ,               ｍａｃｈｉｎｅｒｙ,               ａｎｄ               ｅｑｕｉｐｍｅｎｔ               ｏｖｅｒ               ｔｈｅｉｒ               ｕｓｅｆｕｌ               ｌｉｆｅ. Ｔｈｅｒｅ               ａｒｅ               ｓｐｅｃｉｆｉｃ               ｒｕｌｅｓ               ｔｈａｔ               ａｐｐｌｙ               ｆｏｒ               ｔｈｅ               ｄｅｐｒｅｃｉａｔｉｏｎ               ｔｈａｔ               ｃａｎ               ｂｅ               ｃｌａｉｍｅｄ               ａｓ               ａ               ｂｕｓｉｎｅｓｓ               ｅｘｐｅｎｓｅ,               ａｎｄ               ｔｈｅｒｅｆｏｒｅ               ａ               ｄｅｄｕｃｔｉｏｎ               ｆｏｒ               ｔａｘ               ｐｕｒｐｏｓｅｓ. Ｆｏｒ               ｆｉｎａｎｃｉａｌ               ａｃｃｏｕｎｔｉｎｇ               ｐｕｒｐｏｓｅｓ,               ｉｔ               ｃｏｕｌｄ               ｂｅ               ｔｈａｔ               ｔｈｅ               ｓａｍｅ               ｍｅｔｈｏｄ               ｕｓｅｄ               ｆｏｒ               ｔａｘ               ｐｕｒｐｏｓｅｓ               ｍａｙ               ｓｅｒｖｅ               ｔｏ               ｃａｌｃｕｌａｔｅ               ｄｅｐｒｅｃｉａｔｉｏｎ               ｅｘｐｅｎｓｅ               ｉｎ               ｙｏｕｒ               ｂｕｓｉｎｅｓｓ. Ｂｕｔ               ｉｆ               ｙｏｕ               ｗａｎｔ               ａ               ｍｏｒｅ               ｐｒｅｃｉｓｅ               ｄｅｔｅｒｍｉｎａｔｉｏｎ               ｏｆ               ｔｈｅ               ｃｏｓｔ               ｔｈａｔ               ｙｏｕｒ               ｆｉｘｅｄ               ａｓｓｅｔｓ               ｉｎｖｏｌｖｅ,               ｙｏｕ               ｗｉｌｌ               ｎｅｅｄ               ｔｏ               ｍａｋｅ               ｔｈｅ               ｍｏｓｔ               ａｃｃｕｒａｔｅ               ｅｓｔｉｍａｔｅ               ｐｏｓｓｉｂｌｅ               ｏｆ               ｔｈｅｉｒ               ｕｓｅｆｕｌ               ｌｉｆｅ.                Ｕｓｅｆｕｌ               ｌｉｆｅ               ｄｅｐｅｎｄｓ               ｏｎ               ｓｅｖｅｒａｌ               ｆａｃｔｏｒｓ               ｉｎｃｌｕｄｉｎｇ               ｗｈｅｔｈｅｒ               ｔｈｅ               ａｓｓｅｔ               ｉｓ               ｐｕｒｃｈａｓｅｄ               ｎｅｗ               ｏｒ               ｕｓｅｄ,               ｔｈｅ               ｍａｎｕｆａｃｔｕｒｅｒ'ｓ               ｉｎｄｉｃａｔｉｏｎｓ,               ｔｈｅ               ｕｓｅ               ｔｈａｔ               ｉｓ               ｍａｄｅ               ｏｆ               ｔｈｅ               ａｓｓｅｔ,               ｔｈｅ               ｏｐｅｒａｔｏｒｓ'               ｋｎｏｗ-ｈｏｗ,               ｔｈｅ               ｐｅｒｃｅｎｔａｇｅ               ｏｆ               ｉｔｓ               ｃａｐａｃｉｔｙ               ａｔ               ｗｈｉｃｈ               ｔｈｅ               ｅｑｕｉｐｍｅｎｔ               ｏｒ               ｍａｃｈｉｎｅｒｙ               ｉｓ               ｏｐｅｒａｔｅｄ,               ｓｃｈｅｄｕｌｅｄ               ｍａｉｎｔｅｎａｎｃｅ,               ｔｈｅ               ｅｘｐｏｓｕｒｅ               ｏｆ               ｔｈｅ               ａｓｓｅｔ               ｔｏ               ｗｅａｒ               ｆａｃｔｏｒｓ               ｓｕｃｈ               ａｓ               ｗｅａｔｈｅｒ,               ａｎｄ               ｔｈｅ               ｃｏｍｐａｎｙ'ｓ               ｐｏｌｉｃｙ               ｗｉｔｈ               ｒｅｇａｒｄ               ｔｏ               ｓｃｈｅｄｕｌｅｄ               ｒｅｐｌａｃｅｍｅｎｔｓ.                Ｔｏ               ｃａｌｃｕｌａｔｅ               ｄｅｐｒｅｃｉａｔｉｏｎ               ｙｏｕ               ｔａｋｅ               ｔｈｅ               ｉｎｖｅｓｔｅｄ               ａｍｏｕｎｔ,               ｔｈａｔ               ｉｓ               ｔｈｅ               ｉｎｉｔｉａｌ               ａｃｑｕｉｓｉｔｉｏｎ               ｃｏｓｔ,               ａｎｄ               ｓｕｂｔｒａｃｔ               ｔｈｅ               ｓａｌｖａｇｅ               ｖａｌｕｅ,               ｗｈｉｃｈ               ｉｓ               ｔｈｅ               ｖａｌｕｅ               ｙｏｕ               ｅｘｐｅｃｔ               ｔｏ               ｒｅｃｏｖｅｒ               ｆｒｏｍ               ｔｈｅ               ａｓｓｅｔ               ｗｈｅｎ               ｙｏｕ               ｎｏ               ｌｏｎｇｅｒ               ｕｓｅ               ｉｔ. Ｔｈｉｓ               ｇｉｖｅｓ               ｙｏｕ               ｔｈｅ               ｄｅｐｒｅｃｉａｂｌｅ               ｖａｌｕｅ. Ｔｈｅ               ｄｅｐｒｅｃｉａｂｌｅ               ｖａｌｕｅ               ｄｉｖｉｄｅｄ               ｂｙ               ｔｈｅ               ｎｕｍｂｅｒ               ｏｆ               ｐｅｒｉｏｄｓ               ｉｎ               ｗｈｉｃｈ               ｙｏｕ               ｅｘｐｅｃｔ               ｔｏ               ｕｓｅ               ｔｈｅ               ａｓｓｅｔ               (ｉｔｓ               ｕｓｅｆｕｌ               ｌｉｆｅ)               ｇｉｖｅｓ               ｙｏｕ               ｔｈｅ               ｄｅｐｒｅｃｉａｔｉｏｎ               ｃｈａｒｇｅ               ｐｅｒ               ｐｅｒｉｏｄ.                Ｆｉｘｅｄ               ａｎｄ               Ｖａｒｉａｂｌｅ               Ｃｏｓｔｓ                Ｉｎ               ａｄｄｉｔｉｏｎ               ｔｏ               ｂｅｉｎｇ               ｄｉｒｅｃｔ               ｏｒ               ｉｎｄｉｒｅｃｔ,               ｃｏｓｔｓ               ｃａｎ               ａｌｓｏ               ｂｅ               ｆｉｘｅｄ               ｏｒ               ｖａｒｉａｂｌｅ. Ｖａｒｉａｂｌｅ               ｃｏｓｔｓ               ｆｌｕｃｔｕａｔｅ               ａｃｃｏｒｄｉｎｇ               ｔｏ               ｔｈｅ               ｑｕａｎｔｉｔｙ               ｐｒｏｄｕｃｅｄ               ｏｒ               ｔｈｅ               ｌｅｖｅｌ               ｏｆ               ａｃｔｉｖｉｔｙ,               ｗｈｉｌｅ               ｆｉｘｅｄ               ｃｏｓｔｓ               ｒｅｍａｉｎ               ｃｏｎｓｔａｎｔ,               ｒｅｇａｒｄｌｅｓｓ               ｏｆ               ｔｈｅ               ｌｅｖｅｌ               ｏｆ               ｐｒｏｄｕｃｔｉｏｎ               ｏｒ               ａｃｔｉｖｉｔｙ. Ｒｅｎｔ               ａｎｄ               ｉｎｓｕｒａｎｃｅ               ａｒｅ               ｆｉｘｅｄ               ｃｏｓｔｓ               -               ｔｈｅｙ               ａｒｅ               ｔｈｅ               ｓａｍｅ               ｅｖｅｒｙ               ｍｏｎｔｈ. Ｒａｗ               ｍａｔｅｒｉａｌｓ               ａｎｄ               ｓｕｐｐｌｉｅｓ               ａｒｅ               ｇｅｎｅｒａｌｌｙ               ｃｏｎｓｉｄｅｒｅｄ               ｖａｒｉａｂｌｅ               ｃｏｓｔｓ.                Ｓａｌａｒｉｅｓ               ａｎｄ               ｗａｇｅｓ               ｃａｎ               ｂｅ               ｆｉｘｅｄ               ｃｏｓｔｓ               ａｎｄ               ａｌｓｏ               ｖａｒｉａｂｌｅ               ｃｏｓｔｓ. Ｗａｇｅｓ               ｔｈａｔ               ａｒｅ               ｐａｉｄ               ｂａｓｅｄ               ｏｎ               ｔｈｅ               ａｍｏｕｎｔ               ｏｆ               ｗｏｒｋ               ｄｏｎｅ,               ｏｒ               ｔｈｅ               ｎｕｍｂｅｒ               ｏｆ               ｕｎｉｔｓ               ｐｒｏｄｕｃｅｄ,               ａｒｅ               ｃｏｎｓｉｄｅｒｅｄ               ｖａｒｉａｂｌｅ               ｃｏｓｔｓ. Ｔｈｅ               ｓａｌａｒｉｅｓ               ｏｆ               ａｄｍｉｎｉｓｔｒａｔｉｖｅ               ｐｅｒｓｏｎｎｅｌ               ａｒｅ               ｇｅｎｅｒａｌｌｙ               ｆｉｘｅｄ               ｃｏｓｔｓ. Ｉｎ               ａ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ｃｏｍｐａｎｙ,               ｔｈｅ               ｎｕｍｂｅｒ               ｏｆ               ｗｏｒｋｅｒｓ               ｍａｙ               ｃｏｎｆｏｒｍ               ｔｏ               ｐｒｏｄｕｃｔｉｏｎ               ｒｅｑｕｉｒｅｍｅｎｔｓ,               ａｎｄ               ｉｎ               ｔｈｉｓ               ｃａｓｅ               ｓａｌａｒｉｅｓ               ａｎｄ               ｗａｇｅｓ               ｃｏｕｌｄ               ｂｅ               ａ               ｆｉｘｅｄ               ｃｏｓｔ               ｉｎ               ｔｈｅ               ｓｈｏｒｔ               ｔｅｒｍ,               ｂｕｔ               ｖａｒｉａｂｌｅ               ｏｖｅｒ               ｔｈｅ               ｌｏｎｇ               ｔｅｒｍ.                Ｔｈｅ               ｄｅｐｒｅｃｉａｔｉｏｎ               ｏｆ               ｅｑｕｉｐｍｅｎｔ,               ｍａｃｈｉｎｅｒｙ,               ａｎｄ               ｏｔｈｅｒ               ｉｎｓｔａｌｌａｔｉｏｎｓ               ｕｓｅｄ               ｉｎ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ｃａｎ               ｂｅ               ａ               ｖａｒｉａｂｌｅ               ｃｏｓｔ               ｉｆ               ｄｅｐｒｅｃｉａｔｉｏｎ               ｉｓ               ｃａｌｃｕｌａｔｅｄ               ｂａｓｅｄ               ｏｎ               ｍａｃｈｉｎｅ               ｈｏｕｒｓ,               ｆｏｒ               ｅｘａｍｐｌｅ. Ｔｈｅ               ｄｅｐｒｅｃｉａｔｉｏｎ               ｏｆ               ｏｔｈｅｒ               ａｓｓｅｔｓ,               ｗｈｅｎ               ｃａｌｃｕｌａｔｅｄ               ｂａｓｅｄ               ｏｎ               ｅｑｕａｌ               ｐｅｒｉｏｄｓ,               ｗｏｕｌｄ               ｂｅ               ａ               ｆｉｘｅｄ               ｃｏｓｔ.                Ｔｏｔａｌ               Ｃｏｓｔ               ａｎｄ               Ｕｎｉｔ               Ｃｏｓｔ                Ｉｔ               ｉｓ               ｉｍｐｏｒｔａｎｔ               ｔｏ               ｃｏｎｓｉｄｅｒ               ｃｏｓｔｓ               ｏｎ               ａ               ｔｏｔａｌ               ａｓ               ｗｅｌｌ               ａｓ               ｕｎｉｔ               ｂａｓｉｓ. Ａ               ｔｏｔａｌ               ｃｏｓｔ               ｍａｙ               ｓｅｅｍ               ｒｅａｓｏｎａｂｌｅ,               ａｎｄ               ｍａｙ               ｌｅａｖｅ               ａ               ｐｒｏｆｉｔ               ｉｎ               ｏｎｅ               ｍｏｎｔｈ,               ｗｈｅｎ               ａ               ｃｅｒｔａｉｎ               ｎｕｍｂｅｒ               ｏｆ               ｕｎｉｔｓ               ａｒｅ               ｐｒｏｄｕｃｅｄ. Ｂｕｔ               ｔｈｅ               ｓａｍｅ               ｔｏｔａｌ               ｃｏｓｔ               ｉｎ               ａ               ｍｏｎｔｈ               ｗｈｅｎ               ｆｅｗｅｒ               ｕｎｉｔｓ               ａｒｅ               ｐｒｏｄｕｃｅｄ               ｍａｙ               ｂｅ               ｅｘｃｅｓｓｉｖｅ.                Ｆｏｒ               ｅｘａｍｐｌｅ,               ｉｆ               ｙｏｕ               ｈａｄ               ｒｅｖｅｎｕｅｓ               ｏｆ               $50,000               ｏｎｅ               ｍｏｎｔｈ,               ｗｉｔｈ               ａ               ｔｏｔａｌ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ｃｏｓｔ               ｏｆ               $40,000,               ｙｏｕ               ｗｅｒｅ               ｌｅｆｔ               ｗｉｔｈ               ａ               ｇｒｏｓｓ               ｍａｒｇｉｎ               ｏｆ               $10,000. Ｉｎ               ｔｈａｔ               ｍｏｎｔｈ,               ｙｏｕ               ｍａｎｕｆａｃｔｕｒｅｄ               ａｎｄ               ｓｏｌｄ               100               ｕｎｉｔｓ               ａｔ               ａ               ｐｒｉｃｅ               ｏｆ               $500               ｐｅｒ               ｕｎｉｔ,               ａｎｄ               ａ               ｕｎｉｔ               ｃｏｓｔ               ｏｆ               $400. Ｔｈｅ               ｎｅｘｔ               ｍｏｎｔｈ,               ｔｈｅ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ｃｏｓｔ               ｓｔａｙｅｄ               ｔｈｅ               ｓａｍｅ               ａｔ               $40,000. Ｂｕｔ               ｉｎｓｔｅａｄ               ｏｆ               ｍａｎｕｆａｃｔｕｒｉｎｇ               100               ｕｎｉｔｓ,               ｙｏｕ               ｏｎｌｙ               ｍａｎｕｆａｃｔｕｒｅｄ               50. Ｎｏｗ               ｔｈｅ               ｕｎｉｔ               ｃｏｓｔ               ｉｓ               $800               ($40,000               /               50). Ｉｆ               ｙｏｕ               ｓｅｌｌ               ｔｈｅ               50               ｕｎｉｔｓ               ａｔ               ｔｈｅ               ｓａｍｅ               ｐｒｉｃｅ               ｏｆ               $500,               ｙｏｕｒ               ｔｏｔａｌ               ｓａｌｅｓ               ｒｅｖｅｎｕｅ               ｗｏｕｌｄ               ｂｅ               $25,000               (50               ｕｎｉｔｓ               ｘ               $500)               ａｎｄ               ｗｉｔｈ               ｔｈｅ               ｔｏｔａｌ               ｃｏｓｔ               ｏｆ               $40,000               ｙｏｕ               ｗｏｕｌｄ               ｈａｖｅ               ａ               ｌｏｓｓ               ｏｆ               $15,000.                ＡＢＣ               -               Ａｃｔｉｖｉｔｙ               Ｂａｓｅｄ               Ｃｏｓｔｉｎｇ                Ｔｈｉｓ               ｓｙｓｔｅｍ               ｉｓ               ｏｒｉｅｎｔｅｄ               ｔｏｗａｒｄ               ｔｈｅ               ａｃｔｉｖｉｔｉｅｓ               ｃａｒｒｉｅｄ               ｏｕｔ               ｉｎ               ｔｈｅ               ｃｏｍｐａｎｙ,               ｗｉｔｈ               ｔｈｅ               ｐｕｒｐｏｓｅ               ｏｆ               ｄｅｔｅｒｍｉｎｉｎｇ               ｔｈｅ               ｖａｌｕｅ               ｔｈａｔ               ｅａｃｈ               ａｃｔｉｖｉｔｙ               ｉｎ               ｅａｃｈ               ｐｒｏｃｅｓｓ               ａｄｄｓ. Ｔｈｅ               ａｃｔｉｖｉｔｉｅｓ               ａｒｅ               ｔｈｅ               ｓｅｔ               ｏｆ               ｅｌｅｍｅｎｔａｌ               ｊｏｂｓ               ａｎｄ               ｔａｓｋｓ               ｗｈｏｓｅ               ｒｅａｌｉｚａｔｉｏｎ               ｄｅｔｅｒｍｉｎｅｓ               ｔｈｅ               ｆｉｎａｌ               ｐｒｏｄｕｃｔｓ. Ｔｈｅ               ｂａｓｉｃ               ｉｄｅａ               ｂｅｈｉｎｄ               ｔｈｉｓ               ｍｅｔｈｏｄ               ｉｓ               ｔｈａｔ               ｉｔ               ｉｓ               ｔｈｅ               ａｃｔｉｖｉｔｉｅｓ               ａｎｄ               ｎｏｔ               ｔｈｅ               ｐｒｏｄｕｃｔｓ               ｔｈａｔ               ｇｅｎｅｒａｔｅ               ｃｏｓｔｓ,               ａｎｄ               ｉｔ               ｉｓ               ｔｈｅ               ｐｒｏｄｕｃｔｓ               ｔｈａｔ               ｃｏｎｓｕｍｅ               ｔｈｅ               ａｃｔｉｖｉｔｉｅｓ. Ａｎｄ               ｉｎ               ｔｈｉｓ               ｍｏｄｅｌ,               ｔｈｅ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ               ｏｆ               ｓｕｐｐｏｒｔｉｎｇ               ａｃｔｉｖｉｔｉｅｓ               ｔａｋｅ               ｏｎ               ｇｒｅａｔｅｒ               ｉｍｐｏｒｔａｎｃｅ.                Ａｃｃｏｒｄｉｎｇ               ｔｏ               ｔｈｉｓ               ｍｅｔｈｏｄ:               (1)               ｔｈｅ               ｄｉｆｆｅｒｅｎｔ               ｓｕｐｐｏｒｔｉｎｇ               ａｃｔｉｖｉｔｉｅｓ               (ｉｎｄｉｒｅｃｔ               ｅｘｐｅｎｓｅｓ)               ａｒｅ               ｉｄｅｎｔｉｆｉｅｄ               ａｎｄ               ａｎａｌｙｚｅｄ. (2)               Ｔｈｅ               ｃｏｒｒｅｓｐｏｎｄｉｎｇ               ｃｏｓｔｓ               ａｒｅ               ａｓｓｉｇｎｅｄ               ｔｏ               ｅａｃｈ               ａｃｔｉｖｉｔｙ,               ｃｒｅａｔｉｎｇ               ｃｏｓｔ               ｇｒｏｕｐｉｎｇｓ. (3)               Ａｃｔｉｖｉｔｙ               ｍｅａｓｕｒｅｓ               ａｒｅ               ｆｏｕｎｄ,               ｔｈａｔ               ｓｅｒｖｅ               ａｓ               ｔｈｅ               ｃｏｎｎｅｃｔｉｏｎ               ｂｅｔｗｅｅｎ               ｔｈｅ               ａｃｔｉｖｉｔｉｅｓ               ａｎｄ               ｔｈｅ               ｒｅｓｐｅｃｔｉｖｅ               ｉｎｄｉｒｅｃｔ               ｃｏｓｔｓ,               ｗｈｉｃｈ               ｃａｎ               ｂｅ               ｒｅｌａｔｅｄ               ｔｏ               ｔｈｅ               ｆｉｎｉｓｈｅｄ               ｐｒｏｄｕｃｔ. Ｔｈｅｓｅ               ａｃｔｉｖｉｔｙ               ｍｅａｓｕｒｅｓ               ｍｕｓｔ               ｂｅ               ｄｅｆｉｎｅｄ               ｉｎ               ａｃｔｉｖｉｔｙ               ｕｎｉｔｓ               ｔｈａｔ               ｃａｎ               ｂｅ               ｃｌｅａｒｌｙ               ｉｄｅｎｔｉｆｉｅｄ.                Ｔｈｅ               ａｃｔｉｖｉｔｙ               ｍｅａｓｕｒｅｓ,               ｏｒ               "ｃｏｓｔ               ｄｒｉｖｅｒｓ"               ｃｏｕｌｄ               ｉｎｃｌｕｄｅ               ｔｈｅ               ｎｕｍｂｅｒ               ｏｆ               ｐｒｏｄｕｃｔｉｏｎ               ｏｒｄｅｒｓ               ｆｉｌｌｅｄ               ａｎｄ               ｔｈｅ               ｎｕｍｂｅｒ               ｏｆ               ｄｅｌｉｖｅｒｉｅｓ               ｍａｄｅ,               ｆｏｒ               ｅｘａｍｐｌｅ. Ａ               ｈｉｇｈｅｒ               ｃｏｓｔ               ｉｓ               ａｌｌｏｃａｔｅｄ               ｔｏ               ｔｈｏｓｅ               ｐｒｏｄｕｃｔｓ               ｔｈａｔ               ｈａｖｅ               ｄｅｍａｎｄｅｄ               ｍｏｒｅ               ｃｏｓｔ               ｄｒｉｖｅｒｓ               ａｎｄ               ｔｈｅｒｅｆｏｒｅ               ｍｏｒｅ               ｏｆ               ｔｈｅ               ｃｏｍｐａｎｙ'ｓ               ｒｅｓｏｕｒｃｅｓ.                Ｔｈｅ               ａｃｔｉｖｉｔｙ               ｂａｓｅｄ               ｃｏｓｔ               ｍｅｔｈｏｄ               ｉｓ               ｅｓｐｅｃｉａｌｌｙ               ｒｅｌｅｖａｎｔ               ｆｏｒ               ａｎ               ｏｐｅｒａｔｉｏｎ               ｉｎ               ｗｈｉｃｈ               ｉｎｄｉｒｅｃｔ               ｅｘｐｅｎｓｅｓ               ｍａｋｅ               ｕｐ               ａ               ｓｉｇｎｉｆｉｃａｎｔ               ｐａｒｔ               ｏｆ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｍａｎｕｆａｃｔｕｒｉｎｇ               ａ               ｐｒｏｄｕｃｔ. Ｉｎ               ａｎ               ｏｐｅｒａｔｉｏｎ               ｉｎ               ｗｈｉｃｈ               ｒａｗ               ｍａｔｅｒｉａｌｓ,               ｓｕｐｐｌｉｅｓ,               ａｎｄ               ｌａｂｏｒ               ａｒｅ               ｔｈｅ               ｐｒｉｎｃｉｐａｌ               ｃｏｓｔｓ,               ａｎｄ               ｉｎｄｉｒｅｃｔ               ｅｘｐｅｎｓｅｓ               ｍａｋｅ               ｕｐ               ａ               ｌｅｓｓ               ｓｉｇｎｉｆｉｃａｎｔ               ｃｏｍｐｏｎｅｎｔ,               ｔｈｅ               ｔｒａｄｉｔｉｏｎａｌ               ｍｅｔｈｏｄ               ｏｆ               ｃｏｓｔｉｎｇ               ｍａｙ               ｐｒｏｖｉｄｅ               ａ               ｓｕｆｆｉｃｉｅｎｔｌｙ               ｐｒｅｃｉｓｅ               ｃｏｓｔ               ｄｅｔｅｒｍｉｎａｔｉｏｎ.                Ｂｕｔ               ｉｔ               ｓｈｏｕｌｄ               ｂｅ               ｎｏｔｅｄ               ｔｈａｔ               ｔｈｅ               ａｃｔｉｖｉｔｙ               ｂａｓｅｄ               ｃｏｓｔ               ｓｙｓｔｅｍ               ｉｓ               ｄｅｓｉｇｎｅｄ               ｔｏ               ｄｅｆｉｎｅ               ｔｈｅ               ｓｅｔ               ｏｆ               ａｃｔｉｖｉｔｉｅｓ               ｗｈｏｓｅ               ｏｂｊｅｃｔｉｖｅ               ｉｓ               ｔｏ               ｃｒｅａｔｅ               ｖａｌｕｅ               ｆｏｒ               ｔｈｅ               ｂｕｓｉｎｅｓｓ. Ｉｔ               ｉｓ               ａ               ｓｙｓｔｅｍ               ｔｈａｔ               ｇｅｎｅｒａｔｅｓ               ｔｈｅ               ｃｏｓｔ               ｏｆ               ｔｈｅ               ｐｒｏｄｕｃｔｓ,               ｂｕｔ               ｉｓ               ａｌｓｏ               ｕｓｅｄ               ｔｏ               ａｎａｌｙｚｅ               ａ               ｃｏｍｐａｎｙ'ｓ               ｖａｌｕｅ               ｃｈａｉｎ. Ｔｈｅ               ｓｅｔｓ               ｏｆ               ａｃｔｉｖｉｔｉｅｓ               ｔｈａｔ               ｍａｋｅ               ｕｐ               ｔｈｅ               ｏｖｅｒａｌｌ               ｐｒｏｄｕｃｔｉｖｅ               ｐｒｏｃｅｓｓｅｓ               ａｒｅ               ｐｌａｃｅｄ               ｉｎ               ｓｅｑｕｅｎｔｉａｌ               ｏｒｄｅｒ               ｔｏ               ｄｅｔｅｒｍｉｎｅ               ｔｈｅ               ｃｏｓｔ               ｔｈａｔ               ｉｓ               ａｃｃｕｍｕｌａｔｉｎｇ               ｉｎ               ｔｈｅ               ｃｈａｉｎ,               ａｎｄ               ｔｈｅ               ｖａｌｕｅ               ｔｈａｔ               ｉｓ               ａｄｄｅｄ               ｉｎ               ｅａｃｈ               ｐｒｏｃｅｓｓ.                Ｗｈａｔ               ｔｏ               Ｄｏ               ｗｉｔｈ               Ｃｏｓｔｓ                Ｏｎｃｅ               ａｌｌ               ｔｈｅ               ｃｏｓｔｓ               ａｒｅ               ｉｄｅｎｔｉｆｉｅｄ,               ｙｏｕ               ｃａｎ               ｕｓｅ               ｔｈｉｓ               ｉｎｆｏｒｍａｔｉｏｎ               ｔｏ               ｐｌａｎ,               ｂｕｄｇｅｔ,               ａｎｄ               ｆｏｒｅｃａｓｔ. Ｉｎｆｏｒｍａｔｉｏｎ               ｏｎ               ｃｏｓｔｓ               ｃａｎ               ｂｅ               ｕｓｅｄ               ｔｏ               ｓｅｔ               ｔｈｅ               ｐｒｉｃｅｓ               ｔｏ               ｂｅ               ｃｈａｒｇｅｄ               ｆｏｒ               ｔｈｅ               ｐｒｏｄｕｃｔｓ               ａｎｄ               ｓｅｒｖｉｃｅｓ               ｙｏｕｒ               ｂｕｓｉｎｅｓｓ               ｏｆｆｅｒｓ. Ｉｎ               ａ               ｂｕｓｉｎｅｓｓ               ｔｈａｔ               ｗｏｒｋｓ               ｏｎ               ｔｈｅ               ｂａｓｉｓ               ｏｆ               ｊｏｂｓ               ｏｒ               ｐｒｏｊｅｃｔｓ,               ｔｈｉｓ               ｉｎｆｏｒｍａｔｉｏｎ               ｗｉｌｌ               ｅｎａｂｌｅ               ｙｏｕ               ｔｏ               ｑｕｏｔｅ               ａ               ｐｒｉｃｅ               ｔｈａｔ               ｃｏｖｅｒｓ               ａｌｌ               ｙｏｕｒ               ｃｏｓｔｓ               ａｎｄ               ｌｅａｖｅｓ               ｙｏｕ               ｗｉｔｈ               ａｎ               ａｄｅｑｕａｔｅ               ｐｒｏｆｉｔ               ｍａｒｇｉｎ.                Ｙｏｕ               ｎｅｅｄ               ｓｙｓｔｅｍｓ               ｔｏ               ｒｅｃｏｒｄ               ｙｏｕｒ               ａｃｔｕａｌ               ｃｏｓｔｓ. Ｗｉｔｈ               ｔｈｅｓｅ               ｒｅｃｏｒｄｓ               ｙｏｕ               ｃａｎ               ｃｏｍｐａｒｅ               ｙｏｕｒ               ｅｓｔｉｍａｔｅｄ               ａｎｄ               ｂｕｄｇｅｔｅｄ               ｃｏｓｔｓ               ｔｏ               ｔｈｅ               ａｃｔｕａｌ               ｃｏｓｔｓ               ａｎｄ               ｐｅｒｆｏｒｍ               ａ               ｖａｒｉａｎｃｅ               ａｎａｌｙｓｉｓ. Ｂａｓｅｄ               ｏｎ               ｔｈｉｓ,               ｙｏｕ               ｃａｎ               ｔａｋｅ               ｔｈｅ               ｎｅｃｅｓｓａｒｙ               ｍｅａｓｕｒｅｓ               ｉｎ               ｍａｎａｇｉｎｇ               ｙｏｕｒ               ｏｐｅｒａｔｉｏｎ.

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4. My Small Business Set Up – The Hunt for an Accountant

   mysmallbusinesssetup.wordpress.com/   07/05/2010

   ...great snippets of advice from the accountants I am talking to. So if nothing else...you are self-employed and business less than 3 months after you ...

5. Accountants in Canada: Creating a Business Instead of a Job

   ca4ca.wordpress.com/   09/27/2011

   ... Accountants in Canada: Creating a Business Instead of a...leader to a small accounting...feel that their small business accountant is not...

6. ...your car. This log could be a small binder with a form created... traveling for business purpose. During tax time, once... time and money with your accountant by having all of your...

   onlinetaxservices.blogspot.com/   03/02/2008

   ...your car. This log could be a small binder with a form created... traveling for business purpose. During tax time, once... time and money with your accountant by having all of your...

7. Half of small businesses hit by bad debt – NZ Herald

   creditreportinginnz.wordpress.com/   04/04/2011

   .... Roberts said companies should speak to their accountant or small business advisor for advice about trade credit processes. - Susie Nordqvist...

8. Enterprise Toronto’s Small Business Forum 2009 on October 19th

   naoangelinvestor.wordpress.com/   09/23/2009

   ... , Low Cost/No Cost Marketing , How to Start Your Startup , Ask a Lawyer/Accountant . The Small Business Forum is rounded out by facilitated networking...

9. Small Business Websites – How Not To Get Burned

   rkfischer.wordpress.com/   12/15/2011

   ...great brochure for you last year, think again. If you were to select an accountant for your small business, you would research their specialities, look at their designation, find out...

10. MR for Small Business: The Challenge

    jenkinsresearch.wordpress.com/   04/06/2011

    ... of selling services to smaller businesses. Lawyers, accountants and others all need to find ways...

Accountants Small Business - Blog Homepage Results

Small Business Accountantsbysmallbusinessaccountants

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Accountant CPA Torrancebyaccountantcpatorrance

http://accountantcpatorrance.wordpress.com/

There is a growing trend for small and medium businesses to outsource accounting work. The main logic for this trend is because it...

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...and the IRS have made the payroll function a time consuming nightmare for the small business owner. Entrepreneurs spend an average of eight hours a month...

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