...Case 3–18 Analysis Of Mixed Costs In a Pricing Decision CASE 3–18 Analysis of Mixed Costs in a Pricing Decision [LO1, LO2 or LO3 or LO5] Maria Chavez owns a catering company that serves food and beverages at parties and business functions. Chavez’s business is seasonal, with a heavy schedule during the summer months and holidays and a lighter schedule at other times. One of the major events Chavez’s customers request is a cocktail party. She offers a standard cocktail party and has estimated the cost per guest as follows: The standard cocktail party lasts three hours and Chavez hires one worker for every six guests, so that works out to one-half hour of labor per guest. These workers are hired only as needed and are paid only for the hours they actually work. When bidding on cocktail parties, Chavez adds a 15% markup to yield a price of about $31 per guest. She is confident about her estimates of the costs of food and beverages and labor but is not as comfortable with the estimate of overhead cost. The $13.98 overhead cost per labor-hour was determined by dividing total overhead expenses for the last 12 months by total labor-hours for the same period. Monthly data concerning overhead costs and labor-hours follow: | Chavez has received a request to bid on a 180-guest fund-raising cocktail party to be given next month by an important local charity. (The party would last the usual three hours.) She would like to win this contract because the guest list for this charity...
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...The University of the West Indies, St. Augustine Faculty of Social Sciences Department of Management Studies M.Sc. Aviation Management AVMT 6001 – Accounting for Business Decisions AVMT 6001 – Group Project 2 Managerial Accounting - JetBlue Airways Corporation Group Members: Cherrish Bridgemohan - 807001633 Rajiv Debie - 04708006 Israel Duncan - 814004144 Kenrick Duncan - 814002425 Neil Shepherd - 814004177 Signatures: Cherrish Bridgemohan ___________________________ Rajiv Debie Israel Duncan Kenrick Duncan Neil Shepherd ___________________________ ___________________________ ___________________________ ___________________________ November 16, 2014 Table of Contents I. II. Table of Abbreviations ........................................................................................................................ 5 Executive Summary............................................................................................................................ 6 III. Introduction......................................................................................................................................... 7 IV. Background – JetBlue Airways ......................................................................................................... 7 V. Management Accounting Information.............................................................................................. 8 Financial Accounting versus Management Accounting ...........................
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...local commercial bank. The loan proceeds, combined with their own savings, were sufficient to purchase a small manufacturing facility and equipment. To save money, they purchased most of the stainless steel equipment at a dairy farm auction and then converted the equipment to suit their brewing needs. Other supplies and equipment were purchased from a brewers supply house in Tennessee. Through December 2007, MidSouth Microbrewery had grown steadily, and produced three labels of specialty beers. The company’s first profits were posted in 2005. The Brewing Process Brewing is essentially a four-stage process. Direct labor is incurred primarily in stages one, two, and four. To begin brewing a batch, malt, sugar, hops, and water are mixed and “cooked”. MSM uses a 350-liter copper kettle with a natural gas burner for this stage, which takes 4 to 7 hours, depending on the particular brew produced. This produces a mixture referred to as wort. In stage 2, the wort is siphoned through a wort chiller into one of eight fermentation tanks owned by MSM. The wort chiller is a double copper tube in which cold water is forced in one direction in the outer tube and the wort is pumped the other direction into a fermentation tank through the inner tube. This chills the wort as rapidly as possible from boiling temperature to about room temperature. Rapid chilling minimizes the possibility of contamination and bacterial growth in the wort. The chiller can process about 10 liters per minute...
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...an organisation and strategies employed to meet them 5 Task 2. The nature of the national environment in which your chosen business operates 6 2.1. Explain how economic systems attempt to allocate resources effectively 6 2.2. Assess the impact of fiscal and monetary policy on business organisations and their activities 7 2.3. Evaluate the impact of competition policy and other regulatory mechanism on the activities of a selected organisation 7 Task 3. The behaviour of your chosen organisation in its market environment 8 3.1. Explain how market structures determine the pricing and output decisions of the business 8 3.2. Illustrate the way in which market forces shape organisational responses using a range of examples 8 3.3. Judge how the business and cultural environments shape the behaviour of a selected organisation 9 Task 4. The significance of the global factors that shape business activities of your chosen organisation 10 4.1. Discuss the significance of international trade for your organisation 10 4.2. Analysis the impact of global factors on your chosen organisation 10 4.3. Evaluate the impact of European Union policies on your business organisation 11 Part B 12 Task 5. Report 12 a). how the downturn in the UK economy since 2008 and the double dip recession has impacted on your chosen organisation 12 b). how should your chosen organisation respond to these changes 12 Part C 14 Task 6 14 a.i. Potential impact of fiscal changes 14 a.ii Monetary policy 14 ...
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...Who should practice price discrimination in an asymmetric duopoly? Kutsal Dogan Ernan Haruvy University of Texas at Dallas June 2008 Ram C. Rao Abstract Price discrimination is generally thought to improve firm profits by allowing firms to extract more consumer surplus. In competition, however, price discrimination may also be costly to the firm because restrictive incentive compatibility conditions may allow the competing firm to gain market share at the discriminating firm’s expense. Therefore, with asymmetric competition, it may be the case that one firm would let the other firm assume the burden of price discrimination. We investigate optimal segmentation in a market with two asymmetric firms and two heterogeneous consumer segments that differ in the importance of price and product attributes. In particular, we investigate second-degree price discrimination under competition with explicit incentive compatibility constraints thus extending prior work in marketing and economics. Focusing on the managerial implications, we explore whether it would be profitable for either or both firms to pursue a segmentation strategy using rebates as a mechanism. We identify conditions under which one or both firms would want to pursue such segmentation. We find that segmentation lessens competition for the less price-sensitive consumer segment and that this results in higher profits to both firms. A key to understanding this result is the customer remixing that segmentation leads to. We...
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...Marketing Case Study on Axis Communications A MARKETING CASE STUDY ON AXIS COMMUNICATIONS BY JOHN OLUGBENGA ADEGBOYE 08032004784 TABLE OF CONTENTS 1. INTRODUCTION……………………………………………………………………………………………………….3 2. SITUATION ANALYSIS………………………………………………………………………………………………..4 3.1 External Analysis.....................................................................................................4 3.2 Internal Analysis......................................................................................................8 3.3 SWOT Analysis.........................................................................................................9 3. 3.1 The New Product...................................................................................................12 3.2 Marketing Objectives.............................................................................................12 4. MARKETING PLAN........................................................................................................14 4.1 Market Segmentation.............................................................................................14 4.2 Target Market.........................................................................................................17 4.3 Positioning and Differentiation..............................................................................17 4.4 Marketing Mix........................................................................................................18 4.4.1 The...
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...Salvary, Canisius College ABSTRACT Some current research conclude that the numbers in financial statements are not relevant for three basic reasons. The numbers: (1) are not isomorphic with capital market values, (2) do not have a future orientation, and (3) are un-interpretable since they are based upon five different measurement attributes. The lack of isomorphism argument is invalid since actual current performance is not identical with the capital market expectations of future performance. The lack of a future orientation argument is invalid since financial statements capture what has happened and not what is expected to happen. Since a single measurement attribute is required to produce meaningful measures, the un-interpretability argument holds. A unique measurement attribute is identified in this paper to address this problem I. INTRODUCTION In Statement of Financial Accounting Concepts No. 1: Objectives of Financial Reporting by Business Enterprises (SFAC1) [1978], the Financial Accounting Standards Board (FASB) maintains that the function of financial accounting is to generate information useful to a group of users (investors and creditors) for decision-making. The focus on that specific function (decision-making) leads to a concern for predictive value, as opposed to feedback value, in financial statements. This focus has questioned the relevance of the information contained in financial statements for investors’ prediction of the securities market values/stock...
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...Chapter 10 1 Introduction Pricing Els Gijsbrechts and Katia Campo Objectives This chapter does not have as its aim the provision of ready-made methods for the assessment of price levels. Its objectives are: 1 to indicate the importance and complexity of price decisions for marketing managers; 2 to consider what is a ‘price’; 3 to identify the factors internal to the firm that influence price decisions; 4 to identify the factors external to the firm that influence price decisions; 5 to discuss pricing strategies and tactics. C onsider a Belgian couple contemplating a shopping trip to London during the Christmas period. The cheapest way to cross the Channel would be to take a ticket on the ferry from Oostende to Ramsgate, which would amount to about Bfr. 1,500 per person. While they can afford this from a budgetary viewpoint, taking the boat would mean spending about five hours travelling, which would mean losing almost half of the ‘available’ weekend to hunt for interesting bargains in the London shopping area. Taking the plane would drastically reduce travelling time, but the air fare of Bfr. 4,900 per person is not overly appealing. Friends recommend that they buy a combined ticket from the Belgian Railways and the Channel (regular price: Bfr. 3,465 per person). This seems to be the most interesting option, but unfortunately no more regular tickets are available for the morning of the Christmas weekend. The price of a first classRailway/Channel ticket (Bfr. 6,960 per...
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...An analysis of the choice between separated and mixed operation model for ICBC( London) Abstract: Since the fifth wave of Merge and Acquisition in the 1990s, the global banking industries have developed towards the direction of large-scale, international and omnipotent banks. The mixed operation of the commercial banks had already been the leading trend in the 21st century. With China’s entrance into WTO at the end of last century, the Chinese financial institutions, especially the Chinese bank industries, are destined to participate in the global economy and to face the keen competition from the "financial conglomerate" of the western developed countries. The commercial banks still operate separately at present according to the law. Being the important part of Chinese financial market, the Industrial and Commercial Bank of China (ICBC) as one of the big-four state-owned commercial banks should make an important decision on whether or not fully introduce the mixed operation for operating in UK. This study analyzes the difference of the operation model of HSBC and ICBC are operating in the UK at present, and examines the advantages and disadvantages of both separated and mixed operation for ICBC (London). Furthermore, it proposes the realistic choice of operation model for ICBC (London) under the existing Chinese financial system and the market condition of UK. This paper argues that the separated operation model of ICBC and investment banks in the short term will not change...
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...Semester-2 Semester-3 Semester-4 Course credit Course credit Course credit Language Skills @ Written Analysis & Communication @ Soft skills II @ Employability Skills @ IT & MIS 2 Soft skills I @ Computing skills 2 Social Media Marketing @ 2 Legal Aspects of Business 2 Business Strategy 3 Management Control Systems 3 Micro Economics 3 Macro Economics 3 Business Environment 3 Business Ethics & Corporate Governance 2 Quantitative Methods-1 3 Business Research Methods 3 Quantitative Methods-2 3 Core Elective-1 3 Core Elective1 3 Core Elective-2 3 Core Elective2 3 Elective-1 3 Elective-1 3 Elective-2 3 Elective-2 3 Grand Project-1 3 Grand Project-2 3 Principles of Management Basic Building Blocks Autumn Break Executive Skills Organisational Behavior Human Resources Management 3 Marketing Management 1 3 Marketing Management -2 3 Understanding Financial Statements 3 Financial Mgt 3 Operation Management Management Domain 3 3 Basics of Business Planning 2 Electives Credits Autumn Break credit SUMMER INTERNSHIP Course S 1 22 S 2 24 Total Credits 2 8 S 3 21 S 4 20 95 Index Sr.No Subject Faculty Credits 1 Written Analysis & Communication ...
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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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...supermarket grocery industry. in two series of field experiments in 26 product categories conducted in an 86-store grocery chain, they find that a 10% EDLP category price decrease led to a 3% sales volume increase, whereas a 10% Hi-Lo price increase led to a 3% sales decrease. Because consumer demand did not respond much to changes in everyday price, they found large differences in profitability. An EDLP policy reduced profits by 18%. and Hi-Lo pricing increased profits by 15%. in a third study, the authors increase the frequency of shallow price deals in the context of higher everyday prices and find a 3% increase in unit volume and a 4% increase in profit. Finally, they draw a conceptual distinction between "value pricing" at the back door and EDLP pricing at the front door. R etail formats come and go with changes in consumer tastes, lifestyles, and trends in demography and the economy. Recently it is the "everyday low price" (EDLP) format that has experienced rapid growth and media popularity. The prototypical description of an EDLP pricing policy is as follows: The retailer charges a constant, lower everyday price with no temporary price discounts. These constant everyday prices at the EDLP outlet eliminate week-toweek price uncertainty and represent a contrast to the "HiLo" pricing of promotion-oriented competitors. The Hi-Lo retailer charges higher prices on an everyday basis but then runs frequent promotions in which prices are temporarily lowered below the EDLP...
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...SUBJECTS FT 101C FT 102C FT 103C FT 104C FT 105C FT 106C FT 107C FT 108C Management Principles and Practices Mathematics and Statistics for Managers Accounting for Managers IT and E-Business Fundamentals Business Environment Organization Behavior and Processes Business Communication Business Legislation 1-2 3-4 5-6 7-8 9-10 11-12 13-14 15-16 COURSES AND SYLLABUS FOR SECOND, THIRD AND FOURTH SEMESTER SHALL BE COMMUNICATED LATER. 2 FT-101C MANAGEMENT PRINCIPLES AND PRACTICES Course Objective The objective of this course is to help the students gain understanding of the functions and responsibilities of the manager, provide them tools and techniques to be used in the performance of the managerial job, and enable them to analyze and understand the environment of the organization. Examination The faculty member will award internal marks out of 20 (8 for Tests and 12 for class participation). The semester examination carrying 80 marks will have two sections A and B. Section A worth 60 marks will have 6 theory questions out of which students will be required to attempt any four questions. Section B carrying 20 marks will contain one or more cases. Cases prescribed below are only for classroom discussion and internal evaluation and not for end semester examinations Course contents 1. Concept of Management Functions and Responsibilities of Managers, Fayol's Principles of Management, Management Thought The Classical School, the Human Relations School, Systems Theory...
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...IFRS 13 Fair value measurement IFRS 13 Fair value values 21st century real estate measurement Implications for the real estate 21st century real estate values and construction industry Implications for the real estate and construction industries Contents 1. Introduction 2. Principal impacts of the new standard 3. The definition of fair value 4. The concept of ‘highest and best use’ 4.1 Assessment 4.2 Valuing the highest and best use — alternative use and asset modifications 4.3 Highest and best use and impairment testing 5. The valuation premise for property interests 6. Assessing whether an appraisal complies with IFRS 13 7. Appropriate valuation techniques 8. Applying the fair value hierarchy to real estate appraisals 9. Expanded disclosure requirements 10. Final thoughts 2 2 3 3 3 4 4 5 5 6 7 8 9 IFRS 13 Fair value measurement — 21st century real estate values Implications for the real estate and construction industries 1 1. Introduction IFRS 13 Fair Value Measurement has been recently released by the International Accounting Standard Board (IASB). 2. Principal impacts of the new standard For real estate entities, the adoption of IFRS 13 could result in significant changes to processes and procedures for determining fair value and providing the required disclosures. While the requirement to determine fair value by reference to market participants is not new, the definition of fair value in IFRS 13 differs from that proposed by International Valuation Standards (IVS)...
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...A MARKETING CASE STUDY ON AXIS COMMUNICATIONS BY JOHN OLUGBENGA ADEGBOYE 08032004784 TABLE OF CONTENTS 1. INTRODUCTION……………………………………………………………………………………………………….3 2. SITUATION ANALYSIS………………………………………………………………………………………………..4 3.1 External Analysis.....................................................................................................4 3.2 Internal Analysis......................................................................................................8 3.3 SWOT Analysis.........................................................................................................9 3. 3.1 The New Product...................................................................................................12 3.2 Marketing Objectives.............................................................................................12 4. MARKETING PLAN........................................................................................................14 4.1 Market Segmentation.............................................................................................14 4.2 Target Market.........................................................................................................17 4.3 Positioning and Differentiation..............................................................................17 4.4 Marketing Mix........................................
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