Sports League Sponsorships: A Primer
Sports league sponsorships are a very important source of financing for many leagues across the world. The revenue derived from sponsorship deals is the second biggest source of financing for most sports leagues after the sale of media rights. However, many people are still not aware of the economics of sponsorships. This is because of […]
Why must corporations be taxed?
We live in a capitalist world today. This is the era of multinational corporations. Today, there are many companies that are more powerful as compared to entire nations. This is the reason that they sometimes lobby hard to avoid taxes. Many times, when these companies are in a dominant position, they even threaten governments that […]
Types of Hedge Funds
Hedge funds are simply funds with high leverage and no regulation. They have come into existence in the past couple of decades or so. However, a lot of fund managers have used different strategies and different asset classes. The result is a proliferation of the types of hedge funds. The modern investor therefore has a […]
Risks in Public-Private Partnerships
In the previous article, we have already seen that building stadiums where professional sports franchises operate is a very expensive and complex task. We have also seen that it is not profitable either for the private entity or the government entity to build such stadiums on their own. In such cases, the public-private partnership (PPP) […]
Interest Coverage Ratio – Meaning, Assumptions and Interpretation
The interest coverage ratio is a number that has a lot of importance for the creditors of the firm. This number tells them how safe their investments are and how likely they are to get back principal and interest on time. Formula Interest Coverage Ratio = EBIT / Interest Meaning The interest coverage ratio tells […]
The following is the list of the most probable causes that would cause the job order costing system of the company to fail:
In modern times, we have information technology to the rescue. Companies can now buy off the shelf products for job order costing and use them to simplify the creation of the elaborate system.
The bookkeeping staff needs to be trained about the specifics of job order costing. This training is often expensive and takes time. Only after the process has been somewhat established, does a job order costing system give the benefits that it has been touted to provide.
For instance the allocation base needs to be selected, predetermined overhead rates need to be created and such other tasks need to be done. These tasks require skill and judgment. Only a person that is thorough with the operations of the firm can do these tasks. Thus the firm must ensure that they have relevant expertise before they begin adopting the technique.
The causes of incorrect job order costing can be quite grave. They have been listed below:
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