STANDARD COSTING (VARIANCES) 1.1 Material costs variance = (Standard quantity x Standard Price) – (Actual quantity x Actual price) MCV = (SQ × SP) – (AQ × AP) 1.2 Material price variance = Actual quantity × (Standard price – Actual price) MPV = AQ × (SP – AP) 1.3 Material usage variance = Standard price (Standard quantity – Actual quantity) MUV = SP × (SQ –AQ) 1.4 Material cost variance = Material usage variance + Material price variance MCV = MUV + MPV 1. Material Variance Material usage
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Implementing ECM‚ BPM Systems Determining the ROI for a significant investment‚ such as adopting an ECM or BPM system‚ is no easy task. Doug Allen‚ CRM‚ CDIA+ T he adoption of enterprise content management (ECM) and business process management (BPM) systems is often spurred by regulatory and compliance concerns. As Thomas Hogan‚Vignette president and chief executive officer‚ told Computerworld‚ the move to adopt ECM technology is driven by “two fundamental business catalysts”: 1. How to render more
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2.0 KAIZEN COSTING 2.1 What is Kaizen costing? Kaizen is a Japanese term that means continuous improvement. Kaizen events can be defined as making improvements through a process that emphasize small incremental amounts rather than large or radical improvement. Therefore in order to achieve this kaizen costing not include only continuous cost reduction but also continuous improvement of performance by increase the efficiency throughout the process. 2.2 Why we need Kaizen costing? Market prices
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1.0 Life cycle costing (LCC) 1.1 Definition Life cycle costing is a cost management approach which includes all costs and ensures that all those costs are managed over the life cycle of the product. Product life cycle begins from conception of the product until its abandonment which can be referred as ‘from cradle to grave‘. Product life cycle has four stages: 1) Product planning and initial concept design It involves process of identifying any underlying conditions‚ assumption‚ limitations and
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AN IDEAL APPROACH TO STANDARD COSTING By Jitesh Chandak INTRODUCTION Before you start your study on standard costing you must be clear in your mind that you are going to study a chapter which wants more practice and hard work to develop a strong and sound concept. Costing can be defined as “The technique and process of ascertaining costs.” Standard costing is a technique‚ which uses standards for cost and revenue for the purpose of control through
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Chapter 7 Variable Costing: A Tool for Management Solutions to Questions 7-1 The basic difference between absorption and variable costing is due to the handling of fixed manufacturing overhead. Under absorption costing‚ fixed manufacturing overhead is treated as a product cost and hence is an asset until products are sold. Under variable costing‚ fixed manufacturing overhead is treated as a period cost and is charged in full against the current period’s income. 7-2 Selling and administrative expenses
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2. Establishing a Selling Price for the product Based on the market research of a new product and also the market condition‚ the selling price is established. The desired profit margin is subtracted from the target selling price to determine the target cost. If the target cost is below the company’s current cost‚ the company may decide to introduce the product and functional cost analysis may attempt to reduce cost to an acceptable level. If the target cost is above the current cost‚ functional
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Acknowledgement By the inherent grace of Almighty ALLAH.I have completed my Industrial attachment report. Therefore‚ I would like to thank Him to give me such energy patience in order to continue my uninterrupted diligence over the industrial attachment. I would like to express my intense gratitude to the supervisors of my industrial attachment‚ Mr. Mazedul Islam Mazed ‚ Lecturer ‚Department of Textile Engineering‚ FSIT. Md. Jashim Uddin ‚Director‚ Polka Dots Fashion LTD.GM ‚ AGM ‚Technical Manager
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In this document I am going to explain the definition of cost and the difference between absorption costing vs. variable costing‚ and also if overproducing is an ethical practice or not. Also I will be showing some calculations and data to explain a get a better idea of this entire situation and how we can resolve some problems in management accountant. Cost is the monetary value of goods and services expended to obtain current or future benefits. The way that a cost will be used defines the way
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Suppliers & the Target Costing Process The manufacturing process of AAV relied on high "value-added systems suppliers". MB used their supplier linkages to ensure their systems suppliers were a part of the AAV development process from the concept phase to the production phase. Suppliers were required to produce components on time and within MB quality standards while remaining within their established cost targets. Decisions had to be made early in the development stages so suppliers were brought
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