the year‚ the company has extended their product range to pumps and flow controllers. The main learning outcome from analyzing the case study is manufacturing overhead cost allocation. Exhibit 2 in the case study shows pumps has a highest manufacturing overhead cost compare to valves and flow controller. The common overhead cost drivers in the production are machine hours‚ production runs and hours of engineering work. The key issue in this case study is the gross margin on pump sales is 19.5%
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Opportunity Cost Scarcity of resources is one of the more basic concepts of economics. Scarcity necessitates trade-offs‚ and trade-offs result in an opportunity cost. While the cost of a good or service often is thought of in monetary terms‚ the opportunity cost of a decision is based on what must be given up (the next best alternative) as a result of the decision. Any decision that involves a choice between two or more options has an opportunity cost. Opportunity cost contrasts to accounting cost in
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productivity of the product then the end cost could increase too. Changes of the productivity can increase by changes in technology and human capital. This allows the production of the products to become better managed by managers because it can track all the materials that is needed for that product with better technology. The price increase of $0.20 cents per pound does have an effect on the raw material cost of the product because the increase in price will come to the cost of the product which if the price
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Cost Cutting Tips Most of us spend more than we need to for a lot of things. If you really can afford luxuries such as gourmet teas or designer clothing and still save for your future‚ you’re lucky. However‚ if you’re struggling to meet the financial goals you’ve set on your retirement roadmap‚ it’s time to look for ways to cut expenses—daily‚ monthly‚ and long-term. Start by seeing if you’d benefit from either of these big cost-cutting strategies: •If you’re paying high interest on a mortgage
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Direct Cost 2. Indirect Cost 3. Cost Object 4. Cost Driver 5. Cost Allocation 6. Cost Sheet 7. Semi variable cost 2. Write a detailed note on Target Costing. (DEC‚ 2010) 3. Write a note on methods of absorption of overheads. (DEC‚ 2010) 4. Write a note on classification of overheads. (DEC‚ 2010) 5. Write short notes on the following: i. Product Costs ii. Period costs iii. Out of pocket cost iv. Sunk Costs v. Opportunity cost vi. Replacement cost vii. Joint cost (DEC‚ 2011)
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source same End result ! ends with financial statements ! integral part of other business aspects B. Cost Accounting Terminology 1. Nature of Cost Cost - A sacrifice of resources: Cost is a measurement in monetary terms of the amount of resources used for some purpose. Expense - The cost charged against revenue in a particular accounting period. 2. Purposes of Gathering Cost Information Routine decision making:
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Cost Allocation Paper Cost Accounting Abstract This article’s focus is how cost accounting allocates costs of a manufacturing plant. All things are hypothetical. The conclusions of this report regarding costing of commercial services provided by Goodyear Tire should be recognized as a theory of the way Goodyear Tire conducts business activities‚ rather than suggestions of how Goodyear Tire should conduct business. Goodyear Tire is a publically traded company‚ which has many different
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DEFINITION OF SHORT RUN(SR) Some input cannot be changed within a time period There 2 type of inputs: I. Fixed inputs II. Variable inputs There 2 type of production of costs: I. Fixed costs • Fixed costs are those that do not vary with output and typically include rents‚ insurance‚ depreciation‚ set-up costs‚ and normal profit. II. Variables costs • Variable costs are costs that do vary with output‚ and
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Assignment 2: Cost Behaviors and Allocation Prof. Gilton Grange HSA 525 Analyze the complexity of cost behaviors in health care organizations and describe how costs are classified according to their relationship with volume. Health services managers are vitally interested in how costs are affected by changes in volume. Before costs can be managed‚ one must have an understanding of how and why costs are being incurred. For‚ example medications dispensed from the pharmacy are variable costs items
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Cost Classification and Pricing Student Name Student University Cost and Price Analysis Cost Classification and Pricing Cost Classification According to Maher‚ L. (2005)‚ cost classification refers to the separation of different expenses in various categories. The classifications of costs are required for any firm in order to accurately track and account for the allocation of varies types of cost categories. For Hawk-eye‚ cost classification is crucial since it plays an important part in
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