Traditional Enterprise And Social Enterprise

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Social enterprise is an organization with a clear social mission that aim to financially self-sufficient. Most of its revenue come from the primary activity of trading goods or services. Social businesses should realize who their target market is, what goods or services they should trade, why it is important in the environment, and how their strategy can accomplish their objectives. Commercial approach is important for social businesses to meet their target market needs, also maximize profit for social returns. Traditional enterprise or ordinary business has profit making motive, shareholder accountability, and profit redistributed to shareholders, while social enterprise has mission motive, stakeholder accountability, and income reinvested in social programs or operational cost. The significance in traditional enterprise will be on financial and budget issues (economic value). Social enterprise focuses on social benefits (social value), however, need external or self-generated funds in order to achieve financial sustainability. Both types have a value to acquire sustainability equilibrium. Management accounting and costing system will depend on the organizations activities. Traditional business usually use modern costing system…show more content…
Thus, the conversion costs of direct labour and manufacturing do not need to be identified separately to each batch of eyeglasses. However, iCare should use a predetermined application rate to calculate the conversion cost. This predetermined rate is calculated by using budgeted conversion costs divided by budgeted level of cost driver. In this organization, the most popular products are the mid strength glasses (+1.50, +2.00 and +2.50) and about 60% more of these products are made than strengths +1.00 and +3.00. These productions volume are unstable as the numbers of units in each batch can vary depending on demand in any given

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