Briefly explain Heckscher-Ohlin Theory in International Trade

Below tabulates Heckscher-Ohlin Theory in International Trade:- Unlike the Comparative Advantage Theory which advocates on specializing in activities which is more efficient, Heckshcher-Ohlin Theory advocates that :- A country should specialize in the production of good where the factors of production ( capital,labor, land) favour it. Example like if there is a relative abundance in … Read more

Give brief explanation of Comparative Advantage Theory in International Trade

In international trade, we often heard of the Comparative Advantage Theory which is:- COMPARATIVE ADVANTAGE THEORY : Is advocated by David Ricardo suggesting that countries should specialize in the goods they can produce most efficiently rather than trying for self-sufficiency. Views trade as a positive-sum game in which all countries that participate in trading could … Read more

Gives examples of Material losses

Material losses include loss of quantity, weight or volume of materials. Some examples of material losses which are incurred from the following: Obsolescence re: change of specification results in certain type of materials become useless Losses during handling like in pilferage, breakage, etc Storage like fading, rusting, warping affect the materials or inventories Loss during … Read more

What do you think should the objectives of an efficient system of storekeeping

Inventories whether they are materials, work-in-progress and finished goods constitutes a large part of cost for an organization. It is therefore important to understand the following major objectives of an efficient system of storekeeping which are as follows:- That not too much inventories is held That not too little inventories is held That loss of … Read more

Explain what is a Cost Statement?

A cost statement or cost sheet or cost card shows the detailed cost of a cost centre or cost unit.Append below is a simple format of a cost statement: Cost Statement or Cost sheet or Cost Card  $ Direct material cost            5,000 Direct labor cost            4,000 Direct expenses            1,000 PRIME COST          … Read more

Imprest Petty Cash With Question and Answer

Earlier article on  imprest petty cash system refers. Below is a very simple worked question and answer for the reader to enhance the understanding of imprest petty cash system. Question: ABC Enterprise has the following petty cash transaction for the month of January 2012:- Jan Description $ 1 Received from cashier 450.00 2 Cleaning 60.00 … Read more

Explain what are Non-current liabilities and current liabilities

As we know liabilities are financial obligations of the business to external parties which consists of two major categories namely: Non-current liabilities and Current liabilities NON- CURRENT LIABILITIES CURRENT LIABILITIES Amounts owing by the business that are NOT REPAID WITHIN ONE YEAR.   Examples are Long term loan, Mortgage on Property and Debenture Amounts owing … Read more

What are the advantages and disadvantages of using the Periodic Review Inventory control system

Append below a table to show the advantages and disadvantages on using the Periodic Review Inventory Control system:   ADVANTAGES of Periodic Review Control System: DISADVANTAGES of Periodic Review Control System: 1 All stock items are reviewed periodically so that there is likely to be less obsolete stocks 1 In general larger stocks are required, … Read more

What are the advantages and disadvantages of using the Re-order Level Inventory control system

The following tabulates the advantages and disadvantages of using the Reorder level inventory control system:   ADVANTAGES of Reorder Level Inventory Control DISADVANTAGES of Reorder Level Inventory Control 1 Lower stocks on average 1 Many items may reached re-order level at the same time, thus overloading the re-ordering systems 2 Under reorder level inventory control … Read more