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Thread: account for

  1. #1
    unpakwon is offline Senior Member
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    Default account for

    I don't understand the following in bold. Could you please explain them?

    Determining Attributable Costs
    You then analyze each of your administrative expenses and allocate to each product or service the exact amount that it costs to administer and account for that product or service. For example, if you have a service manager whom you pay $25,000 per year and you sell 1,000 of your product yearly, you must allocate per item $2.50 for his labor and 1/1,000th of his benefits package.

    What's the meaning of "account for" in the context? And I don't understand the last part. Is it saying "you must allocate 1/1,000th of his benefits package?" If so, I don't know what it means.

    Thank you.

  2. #2
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    Default Re: account for

    "account for" in this context means :make up a specified amount or proportion of : eg social security accounts for about a third of total public spending.

    What is it you don't understand in the last part?
    a) what a benefits package is?
    b) why 1/1,000 of the cost of this is added in calculating the production cost of each product item?

    Are you sure you understand the concept of Attributable Costs?

  3. #3
    unpakwon is offline Senior Member
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    Default Re: account for

    Thank you for the help.

    On the "benefits package", what I didn't understand was the expression "1/1,000th of his benefits package" itself. If this means "1/1,000th of the cost of his benefits package," now I can understand. The word "cost" should have been added for me to understand more clearly.

    Doesn't "attributable costs" mean "the essential cost that it takes to produce each product?"

  4. #4
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    Default Re: account for

    Great
    Great
    Yes
    Correct

    (and congratulations for sorting it out in your own head!)

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