Being able to determine whether a cost is fixed or variable is vital to the understanding of overhead loading and cost behavior. A fixed cost is unchanged with a change to the cost driver. (Horngren‚ Sutton‚ and Stratton p.46) Which means that a fixed cost does not rise with the change is production of your product. A good example of a fixed cost is rent. No matter how many widgets you make (within a relevant range) your rent will not increase. A variable cost‚ on the other hand‚ does change with
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Vinnie owns a painting company with fixed costs of $200 and the schedule for variable costs as below. What is the efficient scale of the painting company? Quantity of Houses Painted per Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Variable Costs | $10 | $20 | $40 | $80 | $160 | $320 | $640 | 2. Your aunt is thinking about opening a hardware store. She estimates that it would cost $500‚000 per year to rent the location and buy the stock. In addition‚ she would have to quit her $50‚000 per year job
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Total cost of ownership (TCO) is a financial estimate whose purpose is to help consumers and enterprise managers determine direct and indirect costs of a product or system. It is a management accounting concept that can be used in full cost accounting or even ecological economics where it includes social costs. Contents • 1 Use of concept o 1.1 Computer and software industries o 1.2 Transportation industry • 2 See also • 3 References 4 External links Use
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CASE STUDY NOTES/ ANALYSIS THE TRUE COST OF ACQUISITION. INTRODUCTION -The department of defense has highlighted its vision and mission but has not broken these down into objectives for each function - Without a breakdown of this mission into workable action plans/ objectives it is therefore very hard to create performance measure and standards of practice - This is evident by the recent happening of Darlene Druyun’s actions while acting in the position of head of procurement - There
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Will Project Creep Cost You—or Create Value? Strict rules that limit a project’s scope can be the key to its success. But you need a system flexible enough to recognize value. by Loren Gary I of a manager’s existence: When do you permit changes to a major project? Allow the wrong changes and the project you’re responsible for can veer off course‚ run over budget‚ and miss key deadlines. Ignore the right change‚ and you fail to capitalize on a major market opportunity. Hence the dilemma: How to
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Ronald Coase noted‚“The cost of doing anything consists of the receipts that could have been obtained if that particular decision had not been taken.” For example‚ the opportunity set for this Friday night includes the movies‚ a concert‚ staying home and studying‚ staying home and watching television‚ inviting friends over‚ and so forth. The opportunity cost of taking job A included the forgone salary of $102‚000 plus the $5‚000 of intangibles from job B. Opportunity cost is the sacrifice of
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manager to plan strategy? The output of concern to the campaign manager is the number of votes. The production function has two inputs‚ television advertising and letters. The use of these inputs requires knowledge of the substitution possibilities between them. If the inputs are perfect substitutes for example‚ the isoquants are straight lines‚ and the campaign manager should use only the less expensive input in this case. If the inputs are not perfect substitutes‚ the isoquants will have a convex
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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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Terrorism: The Total Cost Introduction Terrorism has many costs‚ whether it is emotionally‚ or financially. No matter the results‚ failed or successful‚ there are costs involved. The terrorist utilize finances‚ energy‚ time‚ design and method engineering‚ as well as the one being terrorized incurring the possibility of greater costs. Either way it is viewed‚ the loss of life remains the biggest cost‚ and most impacting. The effect of a single act
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individual employees for human resource activities? Are you concerned about violations of your own privacy because of these kinds of web applications? Have you ever encountered a breach in your privacy in an organization due to use of the Internet? If you do not have a personal example of a breach in your privacy‚ please share an example that you have observed in the workplace. Read the Application Case 11-1‚ “Customizing Bonus Pay Plans‚” on pages 348-352 of the textbook. Answer the three (3)
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