Administration Cost Ratio

This quotient portrays the relationship between administration cost and sales volumes especially in a making set up and also in merchandized organizations dealing with finished goods. The ratio is as follows;

Applicability of Administration Cost Ratio in Decision Making by Management

Administration cost policy-the management need to set up a policy to ensure that the administration cost is controlled by ensuring employees clock in and out of office at the right time. This will ensure no idle labor and no unnecessary absenteeism of employees.

About the Author - Dr Geoffrey Mbuva(PhD-Finance) is a lecturer of Finance and Accountancy at Kenyatta University, Kenya. He is an enthusiast of teaching and making accounting & research tutorials for his readers.