2.0 Analysis of the results 4 2.1 Allocation and Apportionment 2.2 Overhead Absorption Rates 2.3 Cost Determination 2.4 Pricing for Potential Orders 2.5 Profit Analysis 2.6 Sensitivity Analysis 2.6.1 Scenario 1: Increase/Decrease in Direct Material Costs 2.6.2 Scenario 2: Increase/Decrease in Direct
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of Rs2 per unit arises because fixed overhead per unit is based on output of 5‚000 units. If another basis were used margin per unit would differ even though fixed overhead was the same amount in total 2. Build-up or run-down of stocks of finished goods can distort comparison of period operating statements and obscure the effect of increasing or decreasing sales. 3. Comparison between products can be misleading because of the effect of arbitrary apportionment of fixed costs. Where two or more products are manufactured in
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The following essay explains the importance of cost accounting for stakeholders of Multinational Companies‚ particularly the shareholders & the customers. Who are the stakeholders of an organization? according to (Freeman 1984) stakeholder is “any group or individual who can affect or is affected by the achievement of the firm’s objectives” going by this definition stakeholders of a company would include lenders‚ creditors‚ customers‚ shareholders‚ government‚ media‚ political groups‚ local charities
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concerns was that of dealing with the recovery of overhead within a full cost pricing policy. The discussion centred around the traditional method currently in use‚ compared and contrasted with ABC‚ Activity Based Costing a technique which re-examines the problem that has faced accountants for decades – that of allocation and absorption of overhead. Traditional pricing method has been based upon absorption costing and the treatment of overhead usually followed a set procedure. • Cost centres
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methods of absorption of overheads. (DEC‚ 2010) 4. Write a note on classification of overheads. (DEC‚ 2010) 5. Write short notes on the following: i. Product Costs ii. Period costs iii. Out of pocket cost iv. Sunk Costs v. Opportunity cost vi. Replacement cost vii. Joint cost (DEC‚ 2011) 6. Explain the advantages of and objections against Cost Accounting (DEC‚ 2011) 7. Briefly explain suitability‚ merits and demerits of the following methods of absorption of overheads: i.) Percentage
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Will this be our energy future? “Over 75% of the global increase in energy use from 2007-2030 is expected to be met through fossil fuels‚ especially coal‚ and an estimated 77% of the power stations required to meet demand are yet to be built.” World Economic Forum‚ Global Risks 2011. Top Coal Companies In India * Coal India Limited * Singareni Collieries Company Limited * Neyveli Lignite Corporation Areas which create Responsibilities Coal projects have numerous environmental and
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Management Accounting Absorption vs Marginal Costing Report 20813287 Absorption vs. Marginal Costing (Atmospheric Ltd) Contents Page No Memorandum 3 Marginal (Variable) Costing 4 Absorption
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Contributions of Activity-Based Costing (ABC) to the Modern Business Environment In the increasingly competitive business environment‚ the enterprises who intend to maintain and enhance competitive advantages must build an efficient costing system to control‚ plan and decide how to improve the profitability and efficiency of the operation. Activity-based costing system (ABC) is such an advanced costing system that satisfies the needs of companies in modern business environment. This essay gives
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compares and comments on the advantages and disadvantages of Absorption and Marginal costing methods‚ highlighting the key differences between them with a background explanation in relation to‚ types and classification of costs‚ allocation and apportionment and to identify its place within management accounting. In Management accounting‚ the process of measuring and recording all costs within a business is needed in order for there to be an effective accounting system‚ this process is known as Cost
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Explain how an organisation can cost a product and determine its price at any activity level The main costs and elements that a business needs to consider‚ taking into account the nature of these costs as well are: * Expense of buying vehicles or maintaining it * Mortgage * Business Rates * Wages Extra / Wages * Drawings * Advertising * Insurance * Loan repayment interest * Loan repayment capital * Purchases / VAT on purchases * VAT paid to C & E
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