Why Should a Code of Business Conduct Be Used by a Small

question 55

Essay

Why should a code of business conduct be used by a small business?

Apply the comprehension of fixed and variable cost estimates to budgeting and variance analysis.

Realize the method to calculate the rate variance for variable manufacturing overhead costs.

Acquaint with the principle of standard costing system and its application to direct materials and labor.

Understand the impact of activity levels on budget variances and efficiency.

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Definitions:

Indirect Costs

Costs that are not directly traceable to a specific project, product, or activity, typically including overheads like administration and utilities.

Research and Development

Activities undertaken by a business to develop new products or processes, or to improve existing ones, typically involving innovation and technological advancements.

Preproduction Prototypes

Early versions of a product made prior to full-scale production, used for testing and validation.

Capitalized

Costs that are added to the cost basis of an asset on the balance sheet rather than being expensed immediately.