Cost Concepts for Managerial Decision Making Prepared for instructional use in Economics For Managers ECG 507 College of Management North Carolina State Universiy © Stephen E. Margolis 2000 Soon we will be using the concepts of cost that are presented in Landsburg’s chapters five and six to analyze market behavior of firms. With a bit of interpretation‚ however‚ these concepts have immediate application to ordinary decisions that
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process‚ beginning: Units in beginning work-in-process inventory | 400 | Materials costs | $6‚900 | Conversion costs | $2‚500 | Percentage complete for materials | 80% | Percentage complete for conversion | 15% | Units started into production during the month | 6‚000 | Units transferred to the next department during the month | 5‚000 | Materials costs added during the month | $112‚500 | Conversion costs added during the month | $210‚300 | Ending work in process: Units in ending work-in-process
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2. Using budget data‚ what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) were allocated to planned production? What was the actual cost per unit of production and shipping. 3. Prepare a flexible budget for 180‚000 iPhone 4’s and calculate flexible budget variances using actual costs for August. 4. Estimate material price and usage for flash memories‚ labor rate and usage (efficiency) variances‚ and the overhead spending variance for
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COST ANALYSIS Prepared by: Nebuchadnezzar Rabaya OBJECTIVES To provide a basic understanding of the nature of cost analysis. To give highlights on the importance of cost analysis on any venture. To present a clear overview on various types of costs. Cost Definition: an amount that has to be paid or spent to buy or obtain something. Analysis Definition: is the process of breaking a complex topic or substance into smaller parts to gain a better understanding of it. What is cost analysis
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UVA-C-2182 Rev. June 17‚ 2009 THE CRADDOCK CUP Jose Rivaldo shuffled through the papers on his desk and sighed. As the general manager of the Craddock Youth Soccer League (CYSL)‚ Rivaldo was committed to providing highquality soccer activities to boys and girls in the area. In addition to managing regular CYSL operations‚ Rivaldo was heavily involved in putting on a regional soccer tournament‚ the Craddock Cup‚ which brought approximately 32 premier high school soccer teams from throughout the
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manufacturing or trading‚ require cost accounting to track their activities.[1] Cost accounting has long been used to help managers understand the costs of running a business. Modern cost accounting originated during the industrial revolution‚ when the complexities of running a large scale business led to the development of systems for recording and tracking costs to help business owners and managers make decisions. In the early industrial age‚ most of the costs incurred by a business were what modern
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Cost Control: Definitions and Methods Alejandro Madotta Accounting Supervisor II at Apache Corporation The cost of making a particular product or delivering a particular service is calculated by the finance and accounting department‚ with the help of a technique that is termed as Cost Accounting. The principle of cost accounting is very simple. The total cost of manufacturing a set or lot of goods or services is added up together and divided by the number of unites that have been produced‚
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CHAPTER 11: THE COST OF CAPITAL LEARNING GOALS: 1. Understand the key assumptions‚ the basic concept and the specific sources of capital associated with the cost of capital. 2. Determine the cost of long-term debt and the cost of preferred stock. 3. Calculate the cost of common stock equity and convert it into the cost of retained earnings and the cost of new issues of common stock. 4. Calculate the weighted average cost of capital (WACC) and discuss alternative weighing schemes
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Costs and Revenues What is cost? If you go to a store and like an item and you want to buy it‚ which of the following questions would you ask: What’s the price of …..? 0R How much does …. cost? Examples of costs – set-up Examples of costs - running Fixed Costs 5000 What happened to the fixed costs if for some reason the company had technical problems and was unable to produce for 2 weeks? What happens if the landlord decided to raise the rent due to high property prices
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Cost Classification Introduction: In this assignment I will be discussing how costs incurred in any organization may be classified in a number of different ways for a number of different purposes. I will also be looking to find companies that use a variety of different costing techniques and methods. I will also be discussing the comparisons between marginal and absorption costing and how the concept of activity based costing can also be compared with these. To complete the assignment I will
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