products. Chuck questioned if the current cost-management system was providing the management with accurate data about product costs. In a traditional‚ volume-based product-costing system‚ only a single predetermine overhead rate is used. All manufacturing-overhead costs are combined into one cost pool‚ a grouping of individual indirect cost items‚ and they are applied to products on the basis of a single variable that costs over a given time span (cost driver) that is closely related to production
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Product cost is the cost of direct labor‚ direct materials‚ and manufacturing overhead that are consumed to create a product. Product cost can also be considered the cost of the labor required to deliver a service to a customer. Direct Material Cost Definition: Direct material cost is the cost of materials used to manufacture a product or provide a service. Direct Labor Definition: Direct labor is production or services labor that is assigned to a specific product‚ cost center‚ or work order
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Each and every person has the potential and free choice to pursue a career as an entrepreneur. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Motivation Concepts KEY: pg 29 2. The generation of the 21st century may become known as generation E because they are becoming the most entrepreneurial generation since the Industrial Revolution. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Motivation Concepts KEY: pg 29 3. Determining a person’s “entrepreneurial
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Is it possible for a company or business unit to follow a cost leadership strategy and a differentiation strategy simultaneously? Why or why not? It is possible for a company to continue a cost leadership strategy and a differentiation strategy simultaneously but it does not work for everyone. Some businesses rather follow the low cost way by striving for efficiencies and economies of scale rather than focusing on differentiating themselves from the competitors in a way other than price. Some
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Classify each cost listed below as either a product cost or a period cost for purposes of preparing the financial statements for the bank. 1. The cost of the memory chips used in radar set. * Product Cost 2. Factory Heating Cost * Period Cost 3. Factory Equipment maintenance costs. * Period Cost 4. Training costs for new administrative employees * Period Costs 5. The cost of the solder that is used in assembling the radar sets. * Product costs 6. The Travel
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Cost Accounting – Classification of costs Cost accounting refers to a process of accumulating‚ recording‚ classifying and analyzing all costs incurred at various levels of production. The purpose of cost accounting is manifold. It provides a final selling price‚ suggests the best possible course of action where maximum savings are possible and a strategy for future. Cost accounting is also constructive in comparing the input and output results that ultimately aids the management to arrive at a financial
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Cost reduction Generally defined as the act of cutting costs to improve profitability. Cost reduction‚ should therefore‚ not be confused with cost saving and cost control. Cost saving could be a temporary affair and may be at the cost of quality. Cost reduction implies the retention of essential characteristics and quality of the product and thus it must be confined to permanent and genuine savings in the costs of manufacture‚ administration‚ distribution and selling‚ brought about by elimination
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Topic 6: Management Accounting and Cost Case: Shelter Partnership a. My main learning outcomes from Topic 6 and the Case Study; 1) Firstly‚ I realize management accounting has much to offer. Somehow I can handle physics but not accounting. Now thanks to this course I can appreciate and make sense of it. The bit that really caught my attention was seeing how management accounting can be really useful for business planning‚ cost management‚ budgeting and performance measurement. It offers
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successful cost reduction programmes In the current economic climate‚ most organisations must face up to a prolonged period of extreme competition and funding restrictions. This is particularly the case if the past few years have been focused on growth‚ service improvement or reorganisation (i.e. cost efficiency has not been a recent priority). Such pressures require an approach that reduces costs in a strategic‚ disciplined‚ and sustainable manner - delivered at pace. In our view serious cost reduction
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40‚000 | | 100‚000 | | 404 | | | | 20‚000 | 20‚000 | 40‚000 | | 405 | | | | | 20‚000 | 20‚000 | | Total | 90‚000 | 120‚000 | 90‚000 | 60‚000 | 40‚000 | 400‚000 | 2 Physical Measures Method | Produced | Proportion | Joint Cost Allocation | Unit Cost | 401 | 90‚000 | (90‚000/400‚000)0.225 or 22.5% | (200‚000 x 0.225)45‚000 | (45‚000/90‚000)0.5 | 402 | 120‚000 | (120‚000/400‚000)0.3 or 30% | (200‚000 x 0.3)60‚000 | (60‚000/120‚000)0.5 | 403 | 90‚000 | (90‚000/400‚000)0.225 or 22.5%
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