‘Watch the costs and the profits will take care of themselves.’
Andrew Carnegie, quoted in R. Sobel and D.B. Silicia (1986), The Entrepreneurs – An American Adventure (Houghton Mifflin)Source: Wiley Book of Business Quotations (1998), p. 89.
After completing this chapter you should be able to:
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(1) recording costs
(2) classifying costs
(3) allocating indirect costs to departments
(4) reapportioning costs from service to productive departments
(5) calculating an overhead recovery rate, and
(6) absorbing costs into products and services.