that incurs cost when producing a product or providing a service” (Kimmel‚ 2009‚ pg. 867). Very important detailed information on how these costs are processed through the company’s work flow. The activity-based costing system shows the company management all the deficiencies‚ where cost improvements are needed‚ and where prices need to be increase for future production or location planning. The other reasons that activity-based costing can be used are that these are variable costs. Under variable
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Chapter 9—Break-Even Point and Cost-Volume-Profit Analysis MULTIPLE CHOICE 1. CVP analysis requires costs to be categorized as a. | either fixed or variable. | b. | direct or indirect. | c. | product or period. | d. | standard or actual. | ANS: A PTS: 1 DIF: Easy OBJ: 9-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling 2. With respect to fixed costs‚ CVP analysis assumes total fixed costs a. | per unit remain constant
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Answers… One Phoenix helping another… 1. Purely competitive firms increase total revenue by Hint : Total revenue equals price times quantity sold. A purely competitive firm has control over one of these two variables. A. increasing production B. decreasing production C. increasing price D. decreasing price To increase revenue‚ firms look to increase price or quantity‚ as price multiplied by quantity equals total revenue. Purely competitive firms can sell as much as they want at the market
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THE MANAGEMENT OF OVERHEAD COSTS IN CONSTRUCTION COMPANIES Brian Eksteen1 and David Rosenberg² ¹Professor of Construction Management‚ Faculty of Economic and Building Sciences‚ University of Port Elizabeth‚ P.O. Box 1600‚ Port Elizabeth‚ 6000‚ South Africa ²Senior Lecturer in Cost and Management Accounting‚ Faculty of Economic and Building Sciences‚ University of Port Elizabeth‚ P.O. Box 1600‚ Port Elizabeth‚ 6000‚ South Africa Costs not directly attributable to or recoverable from production
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Introduction Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. When economists use the word "cost‚" we usually mean opportunity cost. The word "cost" is commonly used in daily speech or in the news. For example‚ "cost" may refer to many possible ways of evaluating the costs of buying something or using a service. Friends or newscasters often say "It cost me $150 to buy the iPhone I wanted." Definitions and Basics Opportunity Cost‚ from the Concise
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COST CONTROL INTRODUCTION In our business every decision taken will be reflected in final results. That is why‚ as every area in a restaurant is related‚ we must pay special attention on implementing a structure according to the organization’s features to make sure it is profitable. Running a restaurant requires a set of procedures to optimize resources in order to obtain an economic benefit while satisfying our customers’ needs. We have to develop this administrative procedures through
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Cost‚ Volume‚ and Profit Formulas Heather Jauregui University of Phoenix of Axia College “The Cost-volume-profit (CVP) analysis is the study of the effects of changes in costs and volume on a company’s profits.” (Kimmel‚ P.‚ Weygandt‚ J.‚ & Kieso‚ D. 2003) The analysis is used to maximize efficiency in a business. In order to be effective the CVP analysis has to make several assumptions. These assumptions are that the costs can be fitted into either fixed or variable categories. The
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Coursework – Cost Value Reconciliation Cost Value Reconciliation (CVR) seeks to improve cost control by collating and analysing established totals for costs and value to illustrate the margins profitability of on a project. CVR achieves this by requiring the provision of statutory accounts in addition to the Standard Statement of Accounting Practice number 9 (SSAP9) and secondly provision of all information which have direct implications on the management operations on all levels of the company
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have a sound knowledge of cost behaviour ie fixed costs‚ variable costs‚ semi-variable costs and sunk costs. Answer: Understanding cost behaviour helps manager in anticipation of changes in cost when there is a change in their activities like production‚ sales‚ inventory pile up etc. It provides good assistance in planning‚ cost management and decision making. A number of behaviour patterns exist ranging from fixed to variable and from linear to curvilinear. Many cost predictions techniques are
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Define cost object and give three examples Cost object is defined as “Anything for which a separate measurement of cost is desired”. The term cost object and cost objective is synonymous. Cost object may refer to a process‚ a cost centre‚ and cost units. Cost unit is a quantitative unit of product or service in relation to which cost are ascertained. Cost centre is a location‚ function or item of equipment in respect of which cost are ascertained. 2. Define cost accumulation
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