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The difference between a component's current and allowable costs is used to determine ways to reduce the resources consumed by a component or its processes and as such, a component can be produced more efficiently therefore reducing its cost to achieve its allowable cost.
Balancing the external value that users place on its goods and services with the internal cost of producing the goods and services is critical for delivering social goods and services in a manner that maximizes their benefits to society. Also, functional cost analysis allows governmental administrators to evaluate both the benefits and costs of the components that comprise social goods...
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