The Total product concept refers to the bundle of services offered by a product/service.  As an example for fitness equipment total product can be explained can be explained as all the benefits customers receive by using the product, from good health to the psychological feeling associated with using the product to the time saved by purchasing the good online to the after sales services provided by the manufacturer. Total product concept is used by the [...]

Externalities can be defied as a cost or a benefit that arises from an economic transaction and that falls on people who don’t participate in that transaction. In other words, externalities are outcomes of a transaction that fall on third parties who are not parties to the transaction. Is an example passive smoking is an externality which causes as a result of smoking and it affects non smokers who are not a party to the [...]

The moderen marketing is a result of evolution of the concept of marketing philosophies and there are 5 types of marketing concepts that can be identified. These were originated due to the need and wants of the society which were affected by the PEST factors. Production Era- Production Era was pinoneered by increase in needs of people where by producers tried to satisfy basic needs of people with a generalistic view. The primary concern was [...]

Any economy in the world tries to achieve certain goals which are called macroeconomic variables/goals. These goals are interrelated and they try maintaining good balance between those goals. Macroeconomic goals are 01.  Achieving economic growth 02.  Maintaining low inflation 03.  Low unemployment 04.  Avoid negative balance of payments 05.  Avoiding heavy fluctuations in exchange rates These goals are contradicting with each other and economy has to maintain a healthy balance between these variable for their [...]

Illustration Assume that by coincidence two firms have exactly the same costs and revanue, but that M ltd uses a marginal costing approach to valuation of stock-in-trade in its final accounts, whilst F Ltd has an absorption cost approach. Calculate the gross profit for each company for each of ther first three years of operating from the following: All fixed factory overhead is $9000 per annum. Direct labour costs over each of the three years- [...]

Absorption costing is a technique where the goods are valued considering full production cost of the product of the product. When pricing or valuing the stocks goods are values considering only the production cost of the product (I.e. goods are valued considering variable production costs and the fixed production costs. In other words goods are valued based on the full cost of the production.) Absorption cost of a product can be calculated as follows: