...The budget is the financial expression of the project and should accurately reflect the costs of the proposed research/education/service program. The budget justification provides the sponsor agency and reviewers of the application with information such as why costs are programmatically necessary and how they are calculatced. Reviewers will analyze the financial data to determine if the proposed costs are allocable to the program, allowable under federal cost principles or non-federal sponsor guidelines (whichever is applicable), reasonable and treated consistently by the institution and similar organizations. When the University receives an award, the approved budget items become part of the agreement between the University and the sponsor. Only those costs that are included in the budget or re-budgeted costs allowed by the sponsor should be directly charged to the award. If the cost requires prior institutional and/or sponsor approval after the award is made, the approval must be secured before the cost is incurred. Therefore, it is important to develop a budget that will enable the PI to fulfill all of the programmatic requirements of the project. A budget and budget justification must be provided for: • Proposed direct costs • Proposed cost share • Estimated program income, including projected revenue and expenditures • Facilities and Administration (F&A or Indirect Costs) FUNDING SOURCES One of the first steps in developing a budget is a determination...
Words: 4156 - Pages: 17
...Harvard Business School ftess, 1987) pp. 269. Given the reaction that this book has caused in the management accounting milieu, it seems destined to play an important role in the direction that teaching and research may adopt in the near future. In fact, the accounting literature is already witnessing an increasing number of articles regarding the lack of relevance of management accounting systems (MAS) in the decision making process of the firm. The book of Johnson and Kaplan (J&K) is implicitly divided into three parts. Part I—^The Rise of Management Accounting, chapters 2 through 5, provides an interesting overview of the evolution of management accounting in the United States from the 1880s through the 1920s. According to the authors, MAS were developing and adapting to management's needs, providing relevant, accurate, and timely information. Part II—The Fall of Management Accounting, chapters 6 through 9, analyses and explains the loss of relevance of MAS. Unlike some historians, J&K assert that this was not due to the fact that financial accounting unduly influenced managerial accounting, but to the prohibitive costs of implementing adequate MAS. Part III—Possible Course of Action, chapters 10 and 11, sets out what can be done to recover the relevance of MAS. Tliis review looks at the three parts in tum. The last section provides conclusions. The rise of management accounting In its early years, MAS appeared to fill the need for information regarding the internal activities of...
Words: 2820 - Pages: 12
...Management Accounting Research, 2002, 13, 1–39 doi: 10.1006/mare.2001.0175 Available online at http://www.idealibrary.com on The association between activity-based costing and improvement in financial performance Douglass Cagwin* and Marinus J. Bouwman† This study investigates the improvement in financial performance that is associated with the use of activity-based costing (ABC), and the conditions under which such improvement is achieved. Internal auditors furnish information regarding company financial performance, extent of ABC usage, and enabling conditions that have been identified in the literature as affecting ABC efficacy. Confirmatory factor analysis and structural equation modelling are used to investigate the relationship between ABC and financial performance. Results show that there indeed is a positive association between ABC and improvement in ROI when ABC is used concurrently with other strategic initiatives, when implemented in complex and diverse firms, when used in environments where costs are relatively important, and when there are limited numbers of intra-company transactions. In addition, measures of success of ABC used in prior research appear to be predictors of improvement in financial performance. c 2002 Elsevier Science Ltd. All rights reserved. Key words: activity-based costing; new business initiatives; ABC success; structural equation models. 1. Introduction Activity-based costing1 (ABC) has been promoted and adopted as a basis for making strategic...
Words: 17068 - Pages: 69
...Seventh Edition Accounting for Decision Making and Control Jerold L. Zimmerman University of Rochester To: Conner, Easton, and Jillian ACCOUNTING FOR DECISION MAKING AND CONTROL, SEVENTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2009, 2006, and 2003. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3 2 1 0 ISBN MHID 978-0-07-813672-6 0-07-813672-5 Vice President & Editor-in-Chief: Brent Gordon Vice President of EDP: Sesha Bolisetty Editorial Director: Stewart Mattson Sponsoring Editor: Dick Hercher Marketing Manager: Sankha Basu Editorial Coordinator: Rebecca Mann Project Manager: Erin Melloy Design Coordinator: Brenda A. Rolwes Cover Designer: Studio Montage, St. Louis, Missouri Production Supervisor: Sue Culbertson Media Project Manager: Balaji Sundararaman Compositor: MPS Limited, A Macmillan Company...
Words: 209552 - Pages: 839
...Seventh Edition Accounting for Decision Making and Control Jerold L. Zimmerman University of Rochester To: Conner, Easton, and Jillian ACCOUNTING FOR DECISION MAKING AND CONTROL, SEVENTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2009, 2006, and 2003. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3 2 1 0 ISBN MHID 978-0-07-813672-6 0-07-813672-5 Vice President & Editor-in-Chief: Brent Gordon Vice President of EDP: Sesha Bolisetty Editorial Director: Stewart Mattson Sponsoring Editor: Dick Hercher Marketing Manager: Sankha Basu Editorial Coordinator: Rebecca Mann Project Manager: Erin Melloy Design Coordinator: Brenda A. Rolwes Cover Designer: Studio Montage, St. Louis, Missouri Production Supervisor: Sue Culbertson Media Project Manager: Balaji Sundararaman Compositor: MPS Limited, A Macmillan Company...
Words: 209552 - Pages: 839
...book. By collecting and analyzing this data, a concrete picture may be developed of the plant’s capacity and its improvements, which can greatly help the book’s readers understand and evaluate the cumulative impact from the plant’s “process of ongoing improvement.” Keywords: Production planning, Theory of constraints, Drum buffer rope 1. Introduction: The Goal as Fictional Case Study Eliyahu Goldratt’s manufacturing novel The Goal: A Process of Continuous Improvement has inspired countless professionals in production (and many other fields (Whitford, 2004)) to embark on their own efforts of continuous improvement. As Rand (1986) writes, “It’s a novel, but it’s also a manufacturing text-book, and it’s good on both accounts.” Many reviewers have agreed The Goal is an easy-to read way to get an introduction to production realities (Belis, 1994, The Economist 1995, Dani 2006, Rand 1986). However, no one has taken a detailed look at the numbers presented in the book as a fictional case study. The concept of drum-buffer-rope (DBR) production control has been discussed considerably in the literature (for just a small, recent sample, see Ye and Han 2008, Jodlbauer and Huber 2008, and Watson and Patti 2008). The first formal presentation of DBR was by Goldratt and Fox (1986), but before that detailed presentation, it was first known in The Goal, and that is where most practitioners likely first learn about it. After a casual...
Words: 11282 - Pages: 46
...book. By collecting and analyzing this data, a concrete picture may be developed of the plant’s capacity and its improvements, which can greatly help the book’s readers understand and evaluate the cumulative impact from the plant’s “process of ongoing improvement.” Keywords: Production planning, Theory of constraints, Drum buffer rope 1. Introduction: The Goal as Fictional Case Study Eliyahu Goldratt’s manufacturing novel The Goal: A Process of Continuous Improvement has inspired countless professionals in production (and many other fields (Whitford, 2004)) to embark on their own efforts of continuous improvement. As Rand (1986) writes, “It’s a novel, but it’s also a manufacturing text-book, and it’s good on both accounts.” Many reviewers have agreed The Goal is an easy-to read way to get an introduction to production realities (Belis, 1994, The Economist 1995, Dani 2006, Rand 1986). However, no one has taken a detailed look at the numbers presented in the book as a fictional case study. The concept of drum-buffer-rope (DBR) production control has been discussed considerably in the literature (for just a small, recent sample, see Ye and Han 2008, Jodlbauer and Huber 2008, and Watson and Patti 2008). The first formal presentation of DBR was by Goldratt and Fox (1986), but before that detailed presentation, it was first known in The Goal, and that is where most practitioners likely first learn about it. After a casual reading (or even a careful one),...
Words: 10755 - Pages: 44
...Majesty's” Government. Its objective is to provide the government with coinage at a competitive price and its manufacturing requirement ranges from high volumes of standard coinage to individual service medals or commemorative coins. In the case of the Royal Mint, they follow a unique cost ceiling that their cost base must always be less than the face value of the coins being produced. In order to follow that unique cost ceiling, the researchers follow the concept of simultaneous design by being involved in initiatives to improve materials being used in both coins and dies. Then due to high inflation rate, the face value of the coin is exceeding the cost base of the raw material and with the help of using the concept of simultaneous design, the Royal Mint quickly mitigated the risk by changing the composition of the 2 Pound and 1 Pound coins to a steal core with an electroplated copper outer layer and has significantly reduced the unit cost and it added expected lifetime by using a less expensive metal base. II. Background The Royal Mint has a cost ceiling that the cost base of the material must be less than the face value of the coin being produced. In order to follow that unique cost ceiling, the Royal Mint implemented the Concept of Simultaneous Design to research on how to further improve the materials being used by both coin and die to extend its period of use and to mitigate the risk of high inflation rate of the raw materials. III. Key Problem Based on...
Words: 931 - Pages: 4
...CHAPTER 17 PROCESS COSTING 17-1 Industries using process costing in their manufacturing area include chemical processing, oil refining, pharmaceuticals, plastics, brick and tile manufacturing, semiconductor chips, beverages, and breakfast cereals. 17-2 Process costing systems separate costs into cost categories according to the timing of when costs are introduced into the process. Often, only two cost classifications, direct materials and conversion costs, are necessary. Direct materials are frequently added at one point in time, often the start or the end of the process. All conversion costs are added at about the same time, but in a pattern different from direct materials costs. Conversion costs are often added throughout the process, which can of any length of time, lasting from seconds to several months. 17-3 Equivalent units is a derived amount of output units that takes the quantity of each input (factor of production) in units completed or in incomplete units in work in process, and converts the quantity of input into the amount of completed output units that could be made with that quantity of input. Each equivalent unit is comprised of the physical quantities of direct materials or conversion costs inputs necessary to produce output of one fully completed unit. Equivalent unit measures are necessary since all physical units are not completed to the same extent at the same time. 17-4 The accuracy of the estimates of completion depends on the care and skill of the estimator and...
Words: 13645 - Pages: 55
...industry-organic foods; health foods, natural foods, prepared meals, ethnic ingredients, etc. Publix grocery has benefited from great success in the industry and has expanded out of primary market, Florida. However, with the arrival of globalization impacting margins in almost every industry, the food retailing/supermarket industry has now joined the trend. International and domestic food retailers around the globe have started to internationalize at a brisk rate and open operations around the globe (Mujtaba & Franklin, 2007). The right product pricing is one of the most important matters concerning the growth of companies’ financial performance. Prices should be low enough to draw in customers; however, simultaneously high enough to cover all costs and anticipated profits. Research in the supermarket industry indicates that nine percent of customers leave and shop elsewhere because they think prices are too high. The supermarket business is becoming more and more concentrated as large regional chains such as Kroger, Safeway, Wal-Mart, and Albertson‘s dominate their markets. Publix‘s present strategy is to progressively grow from within and enlarge the Publix culture throughout the stores across different states domestically. If Publix chooses not to go international, they need to be fully equipped to compete with international firms that are planning to attack their market in the upcoming decades....
Words: 3649 - Pages: 15
...Seyhun Shikhaliyev CASE STUDY COLORSCOPE 1. Why would any customer, let alone large advertising agencies and departmental stores, go to Colorscope rather than go to the large printers listed in Exhibit 3? The main line from the colorscope inc background are the corporate was found in march 1976, the first target customers is local customers (small agencies), and after that colorscope growth significantly that thing can be proved in 1988 sales colorscope over than USD 5 Milion and they served Big Customer, since growth they invest capital expenditure in order to improve services. In 1990 when the overall technology growth rapidly and there are more competitor than before, this situation make the condition under pressure, the first impact from this condition is price war, so the market pressure forced him to reduce his own price. After all finally in 1994 , colorscope loss signifant & long term client ( where the client omset is 80 % of his business). If colorscope want to survive in this business they must reevaluate the industry from the operation to his pricing policy. Direct Competitor 1. Larger, more technically savvy printing companies with professional salespeople pushing bundled pricing, integrating pre-press services with printing in a single package, such as R.R. Donnelley & Sons Co. and Quad Graphics. 2. Companies that competed in several different submarkets beyond catalogs, e.g. insert, comic syndications, and coupons, such as American Color and...
Words: 1649 - Pages: 7
...CHAPTER 5: ACTIVITY-BASED COSTING AND MANAGEMENT QUESTIONS 5-1 Product costs are likely distorted when a firm uses a volume-based rate if the plant has more than one activity in its operations and not all activities consume overhead in the same proportion. The more diverse the product mixes of the plant are in volume, sizes, manufacturing processes, or product complexities, the greater the cost distortions are likely to be in using a volume-based rate. Undercosting a product may appear to have increased the reported profit the product earned (assuming the firm did not lower its selling price because of the reported lower product cost). However, the increased profit is, at best, a twist in truth. Costs of the product not charged to the product itself are borne by other products of the firm. Worse, undercosting a product may result in managers erroneously believing the product to be more profitable than other products and shifting the limited resource the firm has into manufacturing, promotion, and sales of the product when, in fact, other products are more profitable to the firm. Severe cost distortions may lead firms not to drop unprofitable products because the cost data show these products are profitable. 5-3 Overcosting does not increase revenues. A firm can increase the selling price of a product, thereby increasing the total revenue from the product only if the market allows. Increases in the selling price of a product without experiencing noticeable decrease in the sales...
Words: 15950 - Pages: 64
...ILLINOIS STATE UNIVERSITY College of Business Department of Accounting ACC 132 –Managerial Accounting Spring 2014 Section 3, Mon/Wed 2:00 - 3:15 pm, SFHB 357 INSTRUCTOR INFORMATION Instructor: Liesel Mitchell, CPA, CMA Office: COB 314 Phone: 438-7588 E-mail: lmitch2@ilstu.edu Office Hours: Mon/Wed 1:00 – 2:00 pm and 3:15-4:15 pm, Other hours by appointment (I am in class M/W from 9:30 am-12:15 pm and off campus on T/Th until 2:30 pm) Graduate Assistant: Sam Koury, skoury@ilstu.edu Tutoring: Accounting Department tutoring, SFHB 127, times TBA Julia N. Visor Academic Center: • Provides free weekly tutoring sessions (must sign up). Also provides assistance with a variety of other skills. • (309) 438-7100; www.ucollege.ilstu.edu/tutoring/ • Location: Vrooman 012 (between Manchester and Hewett dorms) COURSE INFORMATION Course Number, Title and Credit: Accounting 132, Managerial Accounting – 3 hrs credit Objective: This course is designed to introduce students to managerial accounting information, tools, and techniques available to assist them in managing a business as well as the preparation and analysis of cost accounting information. You will be able to understand, record, and analyze the operations of a firm under various conditions of cost application; understand the creation of various budgets and cash flow analysis of a business...
Words: 2025 - Pages: 9
...Dialysis Center to another location, and allow the OP Clinic to utilize the now open space. Gaining the Dialysis Center’s 20,000-square-feet now gives the OP Clinic their additional 25% of space needed for expansion. The Chief Financial Officer (CFO) created a Profit and Liability (P&L) Statement for the expansion, in which he utilized a new indirect cost allocation scheme. In his new indirect cost allocation scheme the CFO used actual facilities cost instead of aggregated facilities cost, which has historically been utilized by the Medical Center. Also noteworthy, is the fact that the directors’ annual bonuses are now going to be based upon full costs instead of only direct costs, which has also been historically utilized by the Medical Center. After viewing the CFO’s P&L Statement with the new indirect cost allocation scheme in place, the Director of the Dialysis Center raised several concerns, which will form the heart of our analysis: 1. Is it fair for the Dialysis Center to suffer from the move even if it had nothing to do with it? 2. Should the Dialysis Center be charged actual facilities cost for its new location? 3. The Dialysis Center books $800,000 in annual...
Words: 2116 - Pages: 9
...Cost Allocation Assignment Kaneilia Williams Accounting in a Health Care Environment ACC/HC 561 April 23, 2012 Ruth E. Brown Academic and Western Hospitals Academic Hospital and Western Hospital share services as a result of a merger about a year ago. There is a parent organization that owns both hospitals and allows each to operate individual as its own profit center. Academic Hospital now handles all laboratory services for both hospitals and Western Hospital handles maternity services for both. Recently, an issue with the charges for amniocentesis arose because Western Hospital demanded a reduction in the price for laboratory services. This price reduction is requested because Western Hospital found an outside laboratory that will provide the same services for $375 instead of $400. The hospitals formed a joint committee address the issue. The cost allocation methods by both hospitals will be reviewed. The committee will decide how the cost centers were determined. The differences between fixed and variable costing will also be displayed. Cost Allocation Methods The cost allocation process involves transferring costs from area or department and allocates them to another area or department. “The goal of cost allocation is to associate costs as closely as possible with the patients who cause them to be incurred” (Finkler, Ward, and Baker, 2007). The main two types of cost allocation are indirect costs and allocation from one department...
Words: 698 - Pages: 3
