...Financial Analysis Report Financial Analysis Report 4/1/2016 4/1/2016 Group Members: Kimhouy Bun 300247684 Mei Yao Liang 300252536 Nipa Chowdhury 300225853 Course Name: ACCT 3420-002 Instructor: Shirley Mauger Date: April 01, 2016 Group Members: Kimhouy Bun 300247684 Mei Yao Liang 300252536 Nipa Chowdhury 300225853 Course Name: ACCT 3420-002 Instructor: Shirley Mauger Date: April 01, 2016 Table of Content I. PROBLEM IDENTIFICATION ……………..……… 3 II. ANALYSIS ………………………………………..….... 3 1. Overhead Assignment ………………………….…… 4 2. Activity-based Costing System ……………..…….… 5 a. Appendix ……………………………….……...... 5 b. ABC and Actual Production Volume ………….…... 5 c. ABC and Capacity Production Volume ……….….... 5 3. Expand and Analysis …………………………..…… 5 III. ALTERNATIVES AND EVALUATION …….……. 6 IV. RECOMMENDATION …………………………..…… 6 I. PROBLEM IDENTIFICATION The main problem in this case is that Wilkerson is having difficulty appropriately pricing its products to retain gross margin in a competitive market. Price cutting by competitors led to a drop of Wilkerson’s pre-tax margin to under 3%, gross margin on sales for pump sales has fallen below 20% which is under the company’s plan. The problem in the current pricing method used by Wilkerson is that the real manufacturing cost of each product is not realistic because of the high proportion of overhead costs which are 806,000 of 1,535,250 (52.5%). The current method assumes...
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...TOURO COLLEGE COURSE SYLLABUS DEPARTMENT: Business COURSE TITLE: Cost Accounting COURSE NUMBER: EBA 213 PREREQUISITES: EBA 101, EBA 102 CREDIT HOURS: 3 DEVELOPER: Professor Simon Saltz LAST UPDATE: December 1,2003 COURSE DESCRIPTION: Cost accounting focuses on cost determination for manufacturers, products and services. This includes the establishment and maintenance of job order and process cost systems, and the classification of costs as product or period, direct or indirect. Also included are managerial techniques and systems such as budgeting and variance analysis, which enable a business to manage its affairs more efficiently . COURSE/ DEPARTMENTAL OBJECTIVES: Students should be able to understand the thinking and systems of the business world. Understanding how the cost of a product is determined, as it moves through the manufacturing process, enables students to gain insight into how pricing decisions are made. They will be in a better position to determine whether a business is price gouging and can be an effective force in countering such behavior. Understanding budgeting systems enables one to properly manage a business and diagnose the causes of poor business performance. This could help preserve jobs for employees and investment value for shareholders. COURSE/ INSTITUTIONAL...
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...Solutions Manual COST ACCOUNTING Fifteenth Edition Charles T. Horngren Srikant M. Datar Madhav V. Rajan ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Acquisitions Editor: Ellen Geary ------------------------------------------------- Editorial Project Manager: Nicole Sam ------------------------------------------------- Editorial Assistant: Christine Donovan ------------------------------------------------- Project Manager: Roberta Sherman ------------------------------------------------- Supplements Project Manager: Andra Skaalrud ------------------------------------------------- Copyright © 2015 Pearson Education, Inc. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying...
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............................................................................................................ 2 Key Decision Criteria .................................................................................................................... 3 Alternatives Analysis ..................................................................................................................... 3 Recommendations ........................................................................................................................ 4 Action and Implementation Plan ................................................................................................... 5 Outcome Measure Specification ................................................................................................... 7 Textbook Questions ...................................................................................................................... 7 Appendix ....................................................................................................................................... 9 Exhibit 1. Net income in traditional and ABC systems. .................................................................. 12 Exhibit 2. Cost per unit based on ABC method ............................................................................... 13 Exhibit 3. Recommended Selling Prices with 35% Gross Margin ................................................ 14 Bibliography .........................................
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...relationship between their costs and prices for each of the three products produced and sold by Destin. One of the products, pumps, is coming under increasingly competitive price pressure. As a result, Destin has been unable to maintain its desired profit margin. At the same time, Destin has been able to raise prices on another product, flow controllers, apparently with no effect on demand and no increase in competition from other manufacturers. As a result of these situations, management is increasingly questioning whether it knows the true manufacturing costs of its products. At the time of the case, Destin was using a conventional cost accounting system in which all overhead was allocated to product based on direct labor dollars. The controller had already recommended to the company president that they might consider a more modern cost accounting system with a somewhat more-refined allocation system, using material cost and machine hours to allocate overhead related to material receiving and handling. A third possible system in which overhead would be allocated based on transactions (an activity-based costing system, or ABC system) is described in the case by the manufacturing manager in such a way that the costs of products under that system can be estimated and compared to the costs under the other two alternative systems. With three sets of product costs to compare, managers are in a position to ask questions about what is causing costs and which system gives the...
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...To download more slides, ebooks, solution manual and test bank, visit http://downloadslide.blogspot.com Solutions Manual COST ACCOUNTING © 2012 Pearson Education, Inc. Publishing as Prentice Hall. SM Cost Accounting 14/e by Horngren © 2012 Pearson Education, Inc. Publishing as Prentice Hall. SM Cost Accounting 14/e by Horngren To download more slides, ebooks, solution manual and test bank, visit http://downloadslide.blogspot.com Solutions Manual COST ACCOUNTING Fourteenth Edition Charles T. Horngren Srikant M. Datar Madhav Rajan Upper Saddle River, NJ 07458 © 2012 Pearson Education, Inc. Publishing as Prentice Hall © 2012 Pearson Education, Inc. Publishing as Prentice Hall. SM Cost Accounting 14/e by Horngren This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Acquisition Editor: Stephanie Wall Editorial Project Manager: Christina Rumbaugh Editorial Assistant: Brian Reilly Project Manager, Production:...
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...Preliminary Test of Cost Accounting Knowledge--Does not affect your grade! Name___________________________________ Mark one letter for each question response. Note that in some cases there are options like ʺD) Both A and C are correct.ʺ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Cost objects include: A) customers C) products B) departments D) All of these answers are correct. 2) Cost tracing is: A) the process of tracking both direct and indirect costs associated with a cost object B) a function of cost allocation C) the assignment of direct costs to the chosen cost object D) the process of determining the actual cost of the cost object 3) Cost allocation is: A) the assignment of indirect costs to the chosen cost object B) the process of determining the actual cost of the cost object C) the process of tracking both direct and indirect costs associated with a cost object D) a function of cost tracing 4) A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of direct costs for the golf equipment line are: A) monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver B) utilities paid for the manufacturing plant C) beverages provided daily in the plant break room D) salaries of the clerical staff that work in the company administrative offices 5) All of the following are true EXCEPT that indirect costs: A) may be included in prime costs C) are not easily traced to products or services ...
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...Business Decision Making Assignment Ali Nafiz S1409011055 Submitted on 9th November, 2014 Table of Contents Task 1 Task 2 Task 3 2-4 5-7 8-10 1 Ali Nafiz S1409011055 TASK 1 a) Anhad Sdn. Bhd. Budgeted statement of profit for the year ending 31 October 2014 RM (000s) Revenue (120000 × 8)1 Less Variable overheads Direct Materials (1200 × 2) × 95%2 Direct Labour (1200 × 1.32)3 Production overheads Selling overheads Distribution overheads Contribution Less Fixed overheads7 Indirect labour Production overheads Selling overheads Distribution overheads Administration overheads Budgeted Net profit 350 800 450 150 750 2500 1576 2280 1584 6004 6405 4206 5524 4076 RM (000s) 9600 1 2 Sales volume increase by 50%, which is equal to 800000 × 150% = 1200000. And the new selling price is RM 8. Material cost per unit is RM2, which remains unchanged, and 5% discount is given on the total. 5% discount would mean the budgeted cost for 2014 would be 95% of the cost of 2013. 3 Assuming that production of one unit takes 1 hour, for 800,000 units it takes 800,000 hours, which means labour 960,000 cost per hour is = 1.2, The new cost/hr for 2014 is 1.2 × 110% = 1.32. 800000 4 5 6 Production overheads increase in proportion with the 50% increase in sales volume; 480,000 280,000 400,000 800,000 × 1200,000 = 600,000 Variable selling overheads increase in line with the sales revenue; 7200,000 × 9600,000 = 640,000. Distribution overheads increase in line with 50%...
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...ACC00146 Management Accounting Unit Information Guide Session 1 2012 © 2012 Southern Cross University Southern Cross University Military Road East Lismore NSW 2480 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Copyright material indicated in this work has been copied under Part VB of the Copyright Act 1968. Contents Contacts and MySCU ............................................................................................................... 4 Unit assessor ................................................................................................................... 4 Lecturer .......................................................................................................................... 4 MySCU ........................................................................................................................... 4 Elluminate Live! ............................................................................................................. 4 Where to get help ...................................................................................................................... 5 School enquiries ............................................................................................................. 5 IT&TS helpdesk..........................................
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...Nova Southeastern University Wayne Huizenga Graduate School of Business & Entrepreneurship Assignment for Course: Submitted to: Submitted by: Date of Submission: Title of Assignment: Case Study Analysis – Datavast Inc.: The Target Segment Decision CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas of words, whether quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course. Student Signature: _____________________________ *********************************************** Instructor's Grade on Assignment: Instructor's Comments: (1) Describe the data storage industry in China in this case. Include comments on technology and issues in accepting new technology? Backup copies of important data was a relatively new concept in China and a large number of companies that backed up their data used outdated storage methods. These storage methods were not very reliable and were sometimes very easily compromised. It was estimated that approximately 20% of China’s small and medium-sized enterprises (SMEs) still used CDs as their primary source of data backup (Hao, 2012). CDs were used mostly for personal...
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...Measurement: Indirect-Cost Variances and Resource- Capacity Management Cases 15-1 Berkshire Toy Company (Source: Dean Crawford and Eleanor G. Henry, “Budgeting and Performance Evaluation at the Berkshire Toy Company,” Issues in Accounting Education, 15 (2) (May 2000), pp. 283-309.) 15-2 The Mesa Corporation (Source: Robert Capettini, C. W. Chow, and J. E. Williamson, “Instructional case: the Proper Use of Feedback Information,” Issues in Accounting Education, 7 (1) (Spring 1992) pp. 48-56.) Readings 15-1: “Using Enhanced Cost Models in Variance Analysis for Better Control and Decision Making,” by Kennard T. Wing, Management Accounting Quarterly (Winter 2000), pp. 1-9. This article points out that oversimplifications of fixed and variable costs can result in the standard costing system not being used or, if used, can lead to bad decisions. That is, misclassifications of cost behavior patterns make variance analyses “paper tigers.” For variance reporting to be useful, financial managers need to develop cost models that reflect how costs actually behave. Discussion Questions: 1. Describe the implications for variance analysis of analyzing a semi-variable cost as either a variable or fixed cost. 2. Describe the implications for variance analysis of analyzing a step-fixed cost as either a variable or fixed cost. 3. Describe the implications on operating decisions of analyzing an operation with mixed costs as either a variable or fixed cost. 15-2:...
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... Specific tools beneath the ABM umbrella include activity analysis, cost driver analysis, activity-based costing, continuous improvement, operational control, performance evaluation, and business process reengineering. 2. Value-added activities are viewed from the customer's perspective because it is the customer who is the end evaluator of the “worth” of a product or service and, therefore, the activities involved in creating that product or service. 3. In a televised football game, the value-added activities are the actual game plays. Non-value-added activities consist of commercials and the time between plays. Activities such as “moving the chains,” measuring to determine if a first down was made, moving the ball from the end of one play to the point where it will be put in play next are all non-value-added activities. People who believe that the commercials are informative and interesting and that the time between plays allows them an opportunity to examine the strategies of the teams and project what each team is likely to do play may disagree with this assessment. 4. Yes, cost drivers exist in traditional accounting systems although they are called "bases for allocation." In traditional systems, a single cost driver such as direct labor hours or machine hours is commonly used rather than multiple cost drivers. Also in traditional systems, volume-based cost drivers are more the norm...
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...Case Assignment Question A1 The chocolate industry is one with many players. There are many custom bar providers as well as big players within the industry. The direct result of that is very high rivalry between competitors within the industry. The internet provides customers with the ease of obtaining information about the various types of chocolate on offer from the many chocolate makers, and that will quite possibly lead to intense price competition between chocolate makers. The indirect result of having many players in the industry is high buyer power. Potential customers have many choices, and are unlikely to show much loyalty towards any chocolate maker. D.C. faces the problem of trying to not only retain its customers but also attract new customers. In the face of these industry forces, D.C. apparently tries to mitigate that by attempting to differentiate it's products from the others. It's strategy appears to be that of trying to create unique and customizable chocolate bars that are most probably uncommon in their current market (European-Styled chocolate bars in an American market), and speed of service. With their inability to compete with larger companies on lowering costs due to their smaller size and resulting lack of economies of scale, they aim to increase the willingness-to-pay of their customers with the novelty, flexibility and speed of delivery of their products. With their focus on the quality and variety of their products, the costs for...
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...create incentives for unethical behavior? 5.Linda Olsen is studying for the next accounting midterm examination. Summarize for Linda what she should know about management functions. BE1-2 The Sarbanes-Oxley Act (SOX) has important implications for the financialcommunity. Explain two implications of SOX. BE1-3 Listed below are the three functions of the management of an organization. 1. Planning 2. Directing 3. Controlling Identify which of the following statements best describes each of the above functions. BE1-4 Determine whether each of the following costs should be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO). (a)Frames and tires used in manufacturing bicycles. (b) Wages paid to production workers. (c) Insurance on factory equipment and machinery. (d) Depreciation on factory equipment. BE1-5 Indicate whether each of the following costs of an automobile manufacturer would be classified as direct...
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...create incentives for unethical behavior? 5.Linda Olsen is studying for the next accounting midterm examination. Summarize for Linda what she should know about management functions. BE1-2 The Sarbanes-Oxley Act (SOX) has important implications for the financialcommunity. Explain two implications of SOX. BE1-3 Listed below are the three functions of the management of an organization. 1. Planning 2. Directing 3. Controlling Identify which of the following statements best describes each of the above functions. BE1-4 Determine whether each of the following costs should be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO). (a)Frames and tires used in manufacturing bicycles. (b) Wages paid to production workers. (c) Insurance on factory equipment and machinery. (d) Depreciation on factory equipment. BE1-5 Indicate whether each of the following costs of an automobile manufacturer would be classified as direct...
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