INTERNATIONAL B-SCHOOL SUBJECT: FINANCIAL & COST ACCOUNTING Total Marks: 80 N.B.: 1)Allquestionsarecompulsory 2) All questions carry equal marks. Q1) ABC Ltd. Produces room coolers. The company is considering whether it should continue to manufacture air circulating fans itself or purchase them from outside. Its annual requirement is 25000 units. An outsider vendor is prepared to supply fans for Rs 285 each. In addition‚ ABC Ltd will have to incur costs of Rs 1.50 per unit for freight and Rs 10‚000
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Q: Is depreciation expense or depreciation cost is fixed cost or variable cost in nature? Fixed costs: Fixed costs are such costs that do not change with the change in activity level within the relevant range. Where relevant range can be defined in terms of time or activity level. Variable costs: Variable costs are such costs that change with the change in activity level . Coming to the question‚ depreciation expense or depreciation cost can either be fixed or variable and this depends on the
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Cost Control and Cost Reduction A business enterprise must survive‚ grow‚ and prosper. Cost Control and Cost Reduction are activities necessary for ensuring that these objectives are fulfilled. With the liberalization of the Indian Economy and Globalization‚ there is now a cut throat competition from various concerns of the world. As a result there is now a race to secure a place for survival. This has increased the importance of cost control and Cost Reduction. Cost Control “Cost control
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Cost Management or Cost Control In broad sense‚ both the terms have the same meaning. Yet cost management seems to connote broader perspective. Cost control to an un-initiated may mean cutting down the incurrence of cost or expenditure every time or in every situation. In reality it is not always so. In many specific situations‚ many times‚ one has to spend or incur cost in order to gain or make more money. It is in fact like an investment. Cost management sounds better then. Profits Making
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the firm theoretically in relation to the market. He pointed out that ‘‘there is a cost of using the price mechanism’’ and ‘‘the most obvious cost of ‘organising’ production through the price mechanism is that of discovering what the relevant prices are’’ (Coase 1937‚ p.390). Making contracts‚ purchasing assets and other properties incurred more costs that were not accounted for by the price mechanism. These costs or what he referred to generally as the ‘‘uncertainties’’‚ are the main factors that
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demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees‚ primarily loan fees but also including service charges on an array of deposit activities and ancillary services. Lending activities‚ however‚ still provide the bulk of a commercial bank’s income. Beside‚ Banks make money from card products through interest payments and fees charged to consumers and transaction fees to companies that accept the cards. To increase its share of the checking account
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Marcos Fava Neves University of São Paulo FEARP - School of Business and Economics mfaneves@usp.br ABSTRACT This paper analyses the citrus agri-food system in Brazil based in the channels of distribution‚ transaction cost economics and contracts referential. Within this analysis a specific transaction was emphasized‚ between the industry that processes the juice and the beverage industry‚ with the purpose of identifying the relationships and the main characteristics that exist in the contracts involved
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Compensation Unions & Labor Relations Cash Inflows Value Creation Information Decisions Economics of Information Database Management Data Modeling IS Planning & Development Discount Rate Financing Decisions Debt vs. Tax Financing Cost of Capital Financial Markets Overview ST fin’l planning = deals w/ short-lived assets and liabilities (working capital management); concerned w/ 1) size of investment in CA like cash‚ A/R‚ Inventory…a tool is cash budget analysis and 2) how
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Backward vertical integration Literature review Oliver Williamson has made important contribution to the field of economics of organizations. He developed a modern transaction cost economics and his research has been striving to explain why different types of relationships between firms occur. His early work described inefficiencies that arise in bilateral relationships‚ for example bargaining under asymmetric information (Williamson 1979). Later on he studied relationship-specific assets and hold-up
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3 Cost-Volume-Profit Analysis Learning Objectives 1. Explain the features of cost-volumeprofit (CVP) analysis 2. Determine the breakeven point and output level needed to achieve a target operating income 3. Understand how income taxes affect CVP analysis 4. Explain how managers use CVP analysis in decision making 5. Explain how sensitivity analysis helps managers cope with uncertainty 6. Use CVP analysis to plan variable and fixed costs 7. Apply CVP analysis to a company producing multiple
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