Question 5.1 Explain the difference between fixed costs‚ semi-fixed costs‚ and variable costs. Fixed costs are those which do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. For example rent expense‚ straight-line depreciation expense‚ etc. Fixed costs are those which do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. For example rent expense‚ straight-line
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Plant overhead $122‚000 D/L rate/hour $30 Youngstown has a traditional cost system. It calculates a plant-wide overhead rate by dividing total overhead costs by total direct labor hours. Assume‚ for the calculations below‚ that plant overhead is a committed (fixed) cost during the year‚ but that direct labor is a variable cost. 1. Calculate the plant-wide overhead rate. Use this rate to assign overhead costs to products and calculate the profitability of the four products. The assignment
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11 Allocation of Joint Costs and Accounting for By-Product/Scrap Objectives After completing this chapter‚ you should be able to answer the following questions: LO.1 LO.2 LO.3 LO.4 LO.5 How are the outputs of a joint process classified? What management decisions must be made before beginning a joint process? How is the joint cost of production allocated to joint products? How are by-product and scrap accounted for? How should not-for-profit organizations account for the cost of a joint activity?
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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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QUESTIONS ON CHAPTER 15 (COST OF CAPITAL) 1.) The Wind Rider Company has just issued a dividend of $2.10 per share on its common stock. The company is expected to maintain a constant 7% growth rate on its dividends indefinitely. If the stock sells for $40 a share‚ what is the company’s cost of equity? 2.) The Ball Corporation’s common stock has a beta of 1.15. If the risk free rate is 5% and the expected return on the market is 12%‚ what is Ball Corp.’s cost of equity capital?
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recognize and reward differences in level of responsibility‚ skill‚ and performance‚ and * manage pay expenditures.Structure setting and adjustment provides a systematic way to manage pay structures. | Elements of a pay structure | A pay structure is defined by several elements‚ including: * coverage – the occupations‚ positions‚ or persons included‚ * the number of pay ranges or grades‚ * the differences between pay ranges‚ and * range width – the difference(s) between the range minimum
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TYPES OF COSTS Introduction :-Production is the result of services rendered by various factors of production.The producer or firm has to make payments for this factor services. From the point of view of the factor inputs it is called ‘factor income’ while for the firm it is ‘factor payment’‚ or cost of inputs.Generally‚ the term cost of production refers to the ‘money expenses’ incurredin the production of a commodity. But money expenses are not the only expensesincurred on the production
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Hippo: Causes and Results of Debt Linda McQuaig’s most recent book‚ "Shooting the Hippo" is about the causes and results of the debt. It is a look at both the factual causes and the arguments which are merely presented to us through the various elements of the media. McQuaig delivers an insightful overview of the extensive media coverage which has bombarded us over the past few years. "With the excitement of a mystery writer‚ McQuaig tells the real story behind the debt." . This book explains the
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Agency Costs of Free Cash Flow‚ Corporate Finance‚ and Takeovers Michael C. Jensen Harvard Business School MJensen@hbs.edu Abstract The interests and incentives of managers and shareholders conflict over such issues as the optimal size of the firm and the payment of cash to shareholders. These conflicts are especially severe in firms with large free cash flows—more cash than profitable investment opportunities. The theory developed here explains 1) the benefits of debt in reducing agency
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Cost Control and Cost Reduction A business enterprise must survive‚ grow‚ and prosper. Cost Control and Cost Reduction are activities necessary for ensuring that these objectives are fulfilled. With the liberalization of the Indian Economy and Globalization‚ there is now a cut throat competition from various concerns of the world. As a result there is now a race to secure a place for survival. This has increased the importance of cost control and Cost Reduction. Cost Control “Cost control
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