leLECTURE 5a Cost Estimation/Segregation Techniques Cost estimation is a term used to describe the measurement of historical cost so as to be able to predict future costs for management decision making. That is‚ historical information is analyzed to provide estimates on which to base future operational To do cost estimation‚ it is important for the Accountants to be able to ascertain the activity level as well as cost drivers which exert main influence on the company activity. A cost driver is
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Your model should look like this: Now with the cost drivers in place‚ we are ready to calculate Auntie Wuni’s monthly costs. • Leave a row under the Spaghetti: Px/box row and create a subtitle ‘Total Cost of Ingredients’ in cell B28 • Hit Ctrl-B on cell B28 to render the title in bold • Starting from cell B29 and moving downwards‚ populate the cells in this section simply with the name of the ingredients‚ i.e. Oil; Tomatoes; Rice; Pepper; Fish; Cow-leg; Beans; Spaghetti. • Now move the
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Cost/Benefit Analysis Evaluating Quantitatively Whether to Follow a Course of Action You may have been intensely creative in generating solutions to a problem‚ and rigorous in your selection of the best one available. However‚ this solution may still not be worth implementing‚ as you may invest a lot of time and money in solving a problem that is not worthy of this effort. Cost Benefit Analysis or CBA is a relatively* simple and widely used technique for deciding whether to make a change. As its
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clear thinking along with presentation | | | Subject Specific Parameters | 1. Understanding the procedures of Costing | Clarity of concept | | | 2. To be able to calculate the unit cost and prepare costing Profit & Loss statement | Precision in cost calculation and preparation of cost sheet | | | Grades | Grade Descriptors | Achieved Yes/No (Y / N) | P | A Pass grade is achieved by meeting all the requirements defined. | | M | Identify & apply strategies/techniques
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of Cost Variability The Methods * The Comparison Method * High and Low Point or Range Method * The Equation Method * The Average Method * The Graphic Method (Scatter diagram) * The Method of Least Squares * The Analytical Method or Degree of Variability Method Illustration From the following month-wise information in respect of semi-variable costs of a firm‚ segregate the cost into fixed and variable elements: Months2009 | Production (Units) | Semi Variable Cost
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Objective 1 Identify and give examples of each of the three basic manufacturing cost categories. 1-1 Classifications of Manufacturing Costs Direct Materials Direct Labor Manufacturing Overhead The Product 1-2 1-2 Direct Materials Raw materials that become an integral part of the product and that can be conveniently traced directly to it. Example: A radio installed in an automobile 1-3 Direct Labor Those labor costs that can be easily traced to individual units of product. Example: Wages paid
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Written by: Edmund Quek CHAPTER 6 THE THEORY OF COST LECTURE OUTLINE 1 2 2.1 2.2 2.3 2.4 2.5 2.6 3 3.1 3.2 3.3 INTRODUCTION SHORT-RUN THEORY OF COST Distinction between fixed cost and variable cost Total cost Marginal cost Average cost Relationship between marginal cost and average cost Optimum capacity LONG-RUN THEORY OF COST Cost minimisation in the long run Long-run average cost Productive efficiency References John Sloman‚ Economics William A. McEachern‚ Economics Richard G. Lipsey and
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Production Cost Analysis and Estimation Applied Problems 1. Jennifer Trucking Company operates a large rig transportation business in Texas that transports locally grown vegetables to San Diego‚ California. The company owns 5 large rigs and hires local drivers paid fixed salaries monthly‚ regardless of the number of trips or tons of cargo that each driver transports each month. The below table presents details about the number of drivers and the total cargo transported by the company at different
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absorption and variable costing 3. Impact on profit under each costing technique 1. Learning objectives a. Explaining the differences between absorption costing and marginal costing b. Explaining the impact on stock valuation & profit under each costing system c. Explaining the impact on under each costing system d. Preparing multi-period absorption and marginal costing profit statements 2. Explaining the differences between absorption costing and Marginal costing 298) Flow of Costs under Full Absorption
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Considering an IPO? The costs of going and being public may surprise you September 2012 A publication from PwC’s Deals practice Table of contents The heart of the matter 1 Embarking upon the IPO process requires insight into the costs An in-depth discussion 4 The initial public offering Cost of going public Cost of being public 5 12 What this means for your business 27 Assess the readiness of your organization for an IPO to appropriately stage the costs incurred and to minimize
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