Project managers must take cost estimates seriously if they want to complete software projects within budget constraints. After developing a good resource requirements list‚ project managers and their software development teams must develop several estimates of the costs for these resources. There are several different tools and techniques available for accomplishing good cost estimation. Software development project managers should prepare several types of cost estimates for most projects. Three
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Behavioral Costing British Aerospace case study A. Introduction When we think about the cost of an aircraft‚ we tend to think of the cost of buying the product rather than the costs of running it! British Aerospace’s service to the customer does not stop at the aircraft acquisition stage‚ when the airplane is sold to the customer. If anything‚ this is when the customer relationship begins. This case study focuses upon the processes involved in behavioral costing aircraft components. Given
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Cost Classifications for Decision-Making. Every decision involves choosing from among at least two alternatives. Only those costs and benefits that differ between alternatives are relevant in making the selection. This concept is explored in greater detail in the chapter on relevant costs. However‚ decision-making contexts crop up from time to time in the text before that chapter‚ so it is a good idea to familiarize students with relevant cost concepts. 1. Differential Costs. A differential cost
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Cost of Quality (COQ) "The cost of quality." It’s a term that’s widely used – and widely misunderstood. The "cost of quality" isn’t the price of creating a quality product or service. It’s the cost of NOT creating a quality product or service. Every time work is redone‚ the cost of quality increases. Obvious examples include: The reworking of a manufactured item. The retesting of an assembly. The rebuilding of a tool. The correction of a bank statement. The reworking of a service‚ such as
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Opportunity cost Have you ever been in the situation deciding which cloth to buy? Have you ever facing the dilemma of to study or to play? Have you ever consider as a seller and choose to lower the price or raise it? In the field of economics‚ here’s a solution for you. The magic word is “opportunity cost”. Opportunity cost in terms of economy is the highest-value alternative one has to give up to engage in an activity. In other words‚ using the same resources such as money and time‚ the best
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COST OF PRODUCTION CONTENTS 1. Introduction 2. Types of costs 3.1 Opportunity‚ implicit and explicit costs 3.2 Fixed and variable costs 3.3 Average costs 3. Types of cost curves 4.4 Marginal cost curve 4.5 Average cost curves 4. Costs in Short run and in the Long run 5.6 Short run 5.7 Long run 5.8 Economies of scale 5. Cost analysis in the real world 6.9 Economies of scope 6.10 Experiential
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production‚ which are limitations in production sequencing mainly due to different fat contents and flavors of various products and sequence-dependent setup times and costs. The objective function that is minimized considers all major sources of variable cost that depend on the production schedule‚ i.e. changeover cost‚ inventory cost and labor cost. The model is applied to a milk production line of a Sala industry in Iran and the results are presented and discussed. Keywords: Production scheduling; Mixed
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use of a single burden rate. Burden costs of the testing rooms as well as other costs such as admin were grouped into a single cost pool and then divided by the total labor dollars. This resulted to a single burden rate of 145% of direct labor dollars (cost driver). This method is not appropriate for Seligram because the information on the case present that direct labor hours and machine hours vary by product line and activity. In addition‚ the burden cost of the main and test room also significantly
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activities; c. Productive activities‚ such as finished goods transportation‚ storage‚ customer contact‚ order processing‚ etc. d. Sales activities to let customers understand and buying of goods‚ such as advertising‚ promotion‚ marketing agency costs‚ etc; e. Service activities‚ including training‚ repair‚ maintenance‚ components renewal etc‚ aiming at improving the added value of products. Auxiliary activities: a. Procurement activities‚ to refer to the purchase of used in enterprise value
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880 Plant Overhead $122‚000 DL rate/hour $30 Y oungstown has a tradition al cost sys tem. It calc ulates a p lant-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. • 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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