Explain the Need for Recording Costs by Department and Assigning

question 79

Essay

Explain the need for recording costs by department and assigning costs to products.

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Definitions:

Profit Margin

A financial metric used to assess a company's profitability by comparing net income to revenue.

Operating Income

The profit realized from a business's normal operations, calculated by subtracting operating expenses from gross profit.

Sales

The total amount of a company's revenues generated from goods or services provided to customers.

Divisional Operating Income

The profit generated from a specific division of a company, excluding expenses and incomes not directly related to the division's operations.