Solution to Chapter 8: Budgeting for Planning and Controlling ___________________________________________________________ CHAPTER 8 QUESTIONS FOR WRITING AND DISCUSSION 1. Budgets are the quantitative expressions of plans. Budgets are used to translate the goals and strategies of an organization into operational terms. 2. Control is the process of setting standards‚ receiving feedback on actual performance‚ and taking corrective action whenever actual performance deviates from planned performance
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Chapter 12 Fundamentals of Management Control Systems Solutions to Review Questions Accounting assigns costs and revenues to “responsibility centers” that correspond to the decision authority of managers. This allows the firm to measure performance based on the results of decisions by the manager. An effective corporate cost allocation system separates the results of decisions by corporate managers from those of business unit managers. Although there are well-developed standards for many
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B. Include optimization analysis and statistical methods. C. Include game theory and capital budgeting. D. All of the above. 6. Economic profit is: A. Total revenue minus total cost. B. Total economic revenue minus total economic cost. C. Total revenue minus total economic cost. D. Total revenue minus total explicit cost. 7. Market processes: A. Rely on the intervention of government regulators to answer Three basic economic questions. B. Summarize the interaction
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Case 26-4: Baldwin Bicycle Company* Note: This case is unchanged from the Eleventh Edition Approach The broad issue in this case is the analysis of the profitability of a company’s sales to specific customers. Most differential cost cases dealing with incremental volume are such that the student can reasonably assume that the “great majority (if not all) of the differential cost items will be variable costs. In this instance‚ a possible medium-to-long term volume increase of 22 percent suggests that
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look at each of these factors separately. Raw Materials Let us calculate the total weight of raw materials used to produce the 4 items and compare that with the total weight of raw materials available Weight / piece (lbs) Patterned glasses 0.5 Paperwights 0.9 Wrapped tumblers 0.5 Vases 0.6 Item Weekly Production 19 10 32 8 Total Weight (lbs) 9.5 9 16 4.8 39.3 The total weight of raw material used = 39.3 lbs. The total weight of raw material scrapped = 50 lbs. Batch size available = 200 lbs. Percentage
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Microeconomic Formulas Total Product = Quantity (Q) Average Product (AP) = Total Product (Q) / Labour (L) Marginal Product (MP) = Change in Total Product / Change in Labour Profit = Total Revenue (TR) – Total Costs (TC) Profit = (Average Revenue – Average Cost) x Quantity Total Revenue (TR) = Price (P) x Quantity (Q) Total Costs (TC) = Total Fixed Costs (TFC) + Total Variable Costs (TVC) Total Cost (TC) = Average Cost (AC) x Quantity (Q) Average Cost (AC) = Total Costs (TC) / Quantity (Q)
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Introduction This report is being produced to analyse the profitability and stability of Biddenden Vineyard using cash flows‚ NPV‚ BEP and various other methods to view the potential for investment. This report will also highlight the prospects of the company and make recommendations that would improve Biddenden Vineyard. Q1. There are a variety of costs within the business‚ they all have a purpose. From looking at Income Statements and the Statement of Financial Position‚ you can analyse where
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will examine GEICO total rewards program. Determine which Facets of the GEICO Total Rewards Program Align with the Five (5) Top Advantages of a Total Rewards Program Outlined in Chapter 2 “Total rewards is a relatively new term coined by members of the human resources professional community and adopted by human resources associations‚ such as the Society for Human Resources Management and WorldatWork‚” (Chron.com‚ 2012). GEICO’s total rewards program aligns with the standard total rewards program
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5. What is the difference between average‚ total‚ and marginal revenue? What is the shape of the total and marginal revenue curves for the individual competitive firm? 6. Why does price equal marginal revenue for the purely competitive firm? What is the relationship to the demand curve for the firm? 7. Below is a demand schedule facing an individual firm. Complete the table by computing average revenue‚ total revenue‚ and marginal revenue. Then answer the following
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would be included in product costs. FALSE 13. Rent on a factory building used in the production process would be classified as a product cost and as a fixed cost. TRUE 14. A fixed cost remains constant if expressed on a unit basis. FALSE 15. Total variable cost is expected to remain unchanged as activity changes within the relevant range. FALSE 16. Country Charm Restaurant is open 24 hours a day and always has a fire going in the fireplace in the middle of its dining area. The cost of the
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