the bottom line of their income statement and is a measure of the firm’s income over a given period of time. The cash flow of a firm shows how a firm has used the cash it earned during a set of time. There are two reasons that the income statement does not show the amount of cash earned. One‚ there are non-cash entries on the income statement and second‚ there are certain uses such as a purchase of a building that are not reported on the income statement. The statement of cash flows utilizes the
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____ 1. A cost is not relevant if it: A. B. C. D. E. Does not differ for each option available to the decision maker. Changes from period to period. Is a future cost. Is a mixed cost. Is a fixed cost. 2. Variable costs will generally be relevant for decision making because they: A. B. C. D. E. Differ between options. Are volume-based. Have not been committed and differ between options. Differ between options and have been committed. Measure opportunity cost. 3. Fixed costs will often be
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IMPACT OF COST ACCOUNTING ON FINANCIAL DECISION INTRODUCTION In the modern business world‚ the nature and functioning of business organizations have become very complicated. They have to serve the needs of variety of parties who are interested in the functioning of the business. These parties constitute the owners‚ creditors‚ employees‚ government agencies‚ tax authorities‚ prospective investors‚ and last but not the least the management of the business. The business has to serve the needs
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Note: Income Statement Format Hanna 2004-08-03 Income Statement Presentation The objective of studying the format and presentation of the income statement is to gain an understanding of the different ways that certain economic events can be presented. Sometimes‚ the type of presentation depends upon management’s intent regarding the future. Needless to say‚ there is a lot of room for the application of judgment when choosing amongst various acceptable income statement formats. Interpreting
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Period 7 Cost of College In 1983‚ the tuition per term at the University of Oregon was $321. There were three terms per year. In the year 2005‚ the cost of tuition at the University of Oregon is $5853 per year‚ or $1951 per term. This growth in the cost of tuition can be modeled by an exponential function: y = a(b)x. The variable y represents the cost of tuition per term‚ and the variable x corresponds to the number of years that have passed since the initial year. To find this exponential
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Cost of equity refers to a shareholder’s required rate of return on an equity investment. It is the rate of return that could have been earned by putting the same money into a different investment with equal risk. How It Works/Example: The cost of equity is the rate of return required to persuade an investor to make a given equity investment. In general‚ there are two ways to determine cost of equity. First is the dividend growth model: Cost of Equity = (Next Year’s Annual Dividend /
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“perform different activities”. Cost leadership strategy Tiger airways has chosen the former it exploiting a cott leadership strategy. It has an integrated set of actions taken to produce services with features that are acceptable to customer at the lowest cost relative to that of competitors. Tiger’s costs structure foolows the shirt-haul low-cost model of Ryanair. It targets a broad customer segment and concentrates on finding ways to lower its costs relative to competitors by constantly
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Sunk costs are costs that are irrecoverable. It’s something that you already spent and that you won’t get back‚ regardless of future outcomes. And remember that the greatest example of sunk cost you pay is with your own time‚ and which you will not be able to recover: all that you lived up until now is gone — you just can’t reclaim that time. Stop clinging to the past and make the most of your life right now. One of the most important lessons about economic costs is that sunk costs are sunk
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Cost Accounting Manual 2013 STUDY NOTES FOR COST ACCOUNTING BY ATAUSH SHAFI Last Updated on: Tuesday‚ January 01 01‚ 2013 1 © For Suggestions & Feedbacks‚ contact: ATAUSH SHAFI (ataushshafi@gmail.com) Cost Accounting Manual 2013 Table of Contents CIMA OFFICIAL TERMINOLOGY .................................................................................... 3 COST OF GOODS SOLD FORMULE................................................................................ 13 COST CLASSIFICATION ...
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xt are 1. Identify the problem and uncertainties 2. Obtain information 3. Make predictions about the future 4. Make decisions by choosing among alternatives 5. Implement the decision‚ evaluate performance‚ and learn An example of interdependencies include absenteeism/low employee morale and increased labour costs. 11‐2 Relevant costs are expected future costs that differ among the alternative courses of action being considered. Historical costs are irrelevant because
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