MARGINAL COSTING AS A COSTING SYSTEM Marginal Costing is a type of flexible standard costing that separates fixed costs from proportional costs in relation to the output quantity of the objects. In particular‚ Marginal Costing is a comprehensive and sophisticated method of planning and monitoring costs based on resource drivers. Selecting the resource drivers and separating the costs into fixed and proportional components ensures that cost fluctuations caused by changes in operating levels‚ as
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therefore cannot be traced to units of product in the same way as direct materials and direct labor. Consequently‚ we must assign overhead costs using an allocation system. There are three methods of overhead allocation 1. The single plant wide overhead rate method (as discussed in Chapter 2) Single overhead rate = Total budgeted overhead for the plant / Total budgeted base With base being direct labor cost‚ direct labor hours or machine hours 2. The departmental overhead rate
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BAYERO UNIVERSITY‚ KANO SCHOOL OF POSTGRADUATE STUDIES‚ FACULTY OF SOCIAL SCIENCES A case study of Activity Based Costing in Lagos State Healthcare By POPOOLA‚ OLUWATOYIN MUSEDIKU JOHNSON Course Facilitator: Professor Kabiru Isa Dandago Being a paper presented in the M.Sc. Accounting Programme‚ Department of Accounting‚ Bayero University‚ Kano-Nigeria December 15‚ 2009 Abstract The purpose of this study is to examine the healthcare systems‚ in particular the blood transfusion
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Position Statement The DBK headquarter sat down and review the sales numbers. A big driver of the years of success was the growth in the number of sales representatives. But Creevey the CEO of DBK was faced with the situation that representatives would not climb the sales ladder up. The rate at which new representatives were transitioning to leader and starting to build their own sales team is slowdown. But the willingness to build up a team is central for the business model of DBK. The reason therefore
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What are the differences between absolute advantage and comparative advantage? Absolute advantage and comparative advantage are two basic concepts to international trade and perhaps two most important concepts in international trade theory. Under absolute advantage‚ one country can produce more output per unit of productive input than another. With comparative advantage‚ if one country has an absolute (dis)advantage in every type of output‚ the other might benefit from specializing in and exporting
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What is the difference between competitive advantage and comparative advantage? Answer: An advantage that a firm has over its competitors‚ that differentiates the Product or services offered by the firm and allows the firm to reduce it’s Cost or generate Higher Revenue or Margin is known as Competitive Advantage. A competitive advantage is something that a consumer views in a product or service as having higher value than the other competitors of the firm in the industry. It is an expertise that
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Martin A perspective on regional and global strategies of multinational enterprises‚ A.Rugman and A.Verbeke; Regional strategies for global leadership‚ Pankaj Ghemawat The importance of globalization and crucial role of MNEs are amplified in first article. However‚ not all MNEs worldwide are considered to be global but rather regional or semi-globalized. Also‚ the article talks about the concept of triad power as power of market penetration and exploitation as well as avoiding blind spots (unpredictable
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2.4 Problems face in implementing Activity Based Costing During the process of implementing the ABC in one firm may face a lot of problems such as technical factor and behavioral factor. As for behavioral factor‚ the implementation of ABC may cause the employee job to be duplicated due to the differences between ABC and GAAP system that need separate operation. This may lead to the unsatisfied behavior of the employee that need to work more as the ABC is implied‚ this will also cause the decrease
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process by which a company makes it methods‚ especially its production processes‚ uniform throughout its organization. Standardization helps cut costs by eliminating duplicated effort and allows a company to take advantage of economies of scale when purchasing supplies. However‚ some advantages may be lost when a company decided to standardize its operations. Disadvantages Loss of Uniqueness If a company builds up a customer base that values its unique niche products‚ or if the company serves a specialized
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Hogle Company – Job Order Costing Example Hogle Company is a manufacturing firm that uses job-order costing. On January 1‚ the beginning of its fiscal year‚ the company’s inventory balances were as follows: Raw materials $20‚000 Work in process 15‚000 Finished goods 30‚000 Prepaid Insurance 10‚000 The company applies overhead cost to jobs on the basis of machine-hours worked. For the current year‚ the company estimated that it would work 75‚000 machine hours and incur $450
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