...the literature review a lot is said about project cost estimates, budgeting and value management applied by different organizations, but not everything stated can be reviewed in this paper. Thus in the following section we will identify and review the following. • Approaches to cost estimation • Importance of cost estimation • And problems of cost estimation 3.1 Approaches to cost estimation Venkataraman et al (2008), states the organizations use a number of approaches to estimate project costs, which normally ranges from a highly technical and quantitative to more qualitative approaches. And according to Tolman et al (1987) virtually all project cost estimations are performed according to one or some combination of the following...
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...Production Cost Analysis and Estimation Applied Problems BUS640 Managerial Economics Gail Coates October 20, 2015 Isabel Wan Introduction The cost that a business incurs when it combines raw material and labor to produce or manufacture a product or service is called production cost. Knowing the distinction between the fixed and variable inputs in the production process is very important in production and cost analysis (Douglas, 2012). We will be examining two different problems of production cost analysis and estimation applied problems in this paper. We will also show which inputs are fixed and which are variable in one of the problems. During the other problem the marginal cost curve and the incremental cost will be described as well as the profit-maximizing price and output levels. PROBLEM 1 Workers | Oven cost- Fixed | Labor cost- Variable | Total cost | 0 | $1,000 | 0 | $1,000 | 1 | 1,000 | 500 | $1,500 | 2 | 1,000 | 1,000 | $2,000 | 3 | 1,000 | 1,500 | $2,500 | 4 | 1,000 | 2,000 | $3,000 | 5 | 1,000 | 2,500 | $3,500 | 6 | 1,000 | 3,000 | $4,000 | 7 | 1,000 | 3,500 | $4,500 | 8 | 1,000 | 4,000 | $5,000 | Number of pizzas-Variable | Average cost | Pizzas per worker | Increase in production | 0 | 0 | 0 | 0 | 75 | 20.00 | 75 | 75 | 180 | 11.11 | 90 | 105 | 360 | 6.94 | 120 | 180 | 600 | 5.00 | 150 | 240 | 900 | 3.89 | 180 | 300 | 1140 | 3.51 | 190 | 240 | 1260 | 3.57 | 180 | 120 | 1360 | 3.68 | 170 | 100 | ...
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...ACC650 Module 4 - Cost Estimation and CVP Analysis Click Link Below To Buy: http://hwcampus.com/shop/acc650-module-4-cost-estimation-cvp-analysis/ 1. DuChien Corporation recently produced and sold 100,000 units. Fixed costs at this level of activity amounted to $50,000; variable costs were $100,000. How much cost would the company anticipate if during the next period it produced and sold 102,000 units? a. $150,000. $151,000. $152,000. $153,000. Some other amount not listed above. 2. The difference between budgeted sales revenue and break-even sales revenue is the: a. contribution margin. contribution-margin ratio. safety margin. target net profit. operating leverage. 3. At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company's break-even point in units is: a. 7,027 (rounded). 8,667 (rounded). 9,286 (rounded). 7,429 (rounded). an amount other than those above. At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company's break-even point in units is: Selling price = 1,000,000/20,000 = 50 VC per unit = 300,000/20,000 = 15 Contribution margin per unit = 50 - 15 = 35 BEP = 260,000/35 = 7428.57 (rounding off 7,429) 4. The contribution-margin ratio is: a. the difference between the selling price and the variable cost per unit. fixed cost per unit divided...
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...Unit six: Principles of budgets in a business environment Assessment You should use this file to complete your Assessment. • The first thing you need to do is save a copy of this document, either onto your computer or a USB drive • Then work through your Assessment, remembering to save your work regularly • When you’ve finished, print out a copy to keep for reference • Then, go to www.vision2learn.com and send your completed Assessment to your tutor via your My Study area – make sure it is clearly marked with your name, the course title and the Unit and Assessment number. Please note that this Assessment document has 7 pages and is made up of 3 Sections. Name: Section 1: The purpose of budgets This section will help you to evidence Learning Outcome 1: Understand the purpose of budgets in a business environment. |Learning objective |Place in Assessment | |1.1 Explain the purpose of budgets for managing financial resources to meet business |Question 1 Page 1 | |requirements | | 1. Why are budgets used to manage financial resources? [1.1] A budget is a plan translated into money and a tool for spread resources and perform strategic plans. Financial...
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...10 Deadly Sins of Software Estimation Steve McConnell © 2002 Construx Software Builders, Inc. All Rights Reserved. www.construx.com D e l e ring Softw are P e ct Succe ss iv roj Construx ® Background Estimation Book v Construx Estimate™ v Construx’ Training s v Construx’ Consulting s v www.construx.com 2 consulting u training u software projects u construx.com Art and Science of Software Estimation Science of estimation is well-developed and well-supported by software tools v Art of estimation relies on rules of thumb and still needs some work v 3 consulting u training u software projects u construx.com Almost-Deadly Sins of Software Estimation Sins #20-#11 Sin #20 Estimating how long “it” will take to build before anyone knows what “it” is 5 consulting u training u software projects u construx.com Sin #19 Assuming that the most reliable estimates come from the people with the most powerful vocal chords 6 consulting u training u software projects u construx.com Sin #18 Telling someone you’ writing an re estimation book, because they will say, “When do you estimate you’ be done, ha ll ha ha.” 7 consulting u training u software projects u construx.com Sin #17 Creating an estimate for a new project by comparing it to a past project … … which overran its estimates... … and ultimately realizing that you based the new project’ plans on the past s project’ estimated results instead of its s actual results ...
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...Background Consumer Cleaning Products (CCPC) is a public manufacturing company with a calendar year the same as the fiscal year. CCPC's supply chain consists of : CCPC introduced a new product September 1, 2009 called Fresh & Bright. Part of CCPC's marketing campaing was to "drop" appromixamatly 500,000 coupons in the Sunday newspaper where Fresh & Bright was sold. The coupon worked in the following way: The 500,000 coupons could be used through October 1, 2010. CCPC has data one six month coupons for other products but does not have any data on one year coupons for detergent. CCPC estimates that two percent of the detergent coupon will be redeemed. As of Septemeber 30, 2009 CCPC has sold $2,000,000 of Fresh & Bright. Issues 1. What is the accounting issue(s) and the relevant components of the autthoritative literature? 2. When should CCPC recognize the effects of the Fresh & Bright coupon donp in its financial statements? 3. What is the dollar amount of the effect of the Fresh & Bright coupon drop on CCPC's financial statement? 4. What would constiture "sufficient evidence" to support CCPC's expected redemtion rate of 2 percent?\ 5. What are the accounting implications if CCPC's estimated redemption rate changes to 2.5 percent at a later point in time? 6. How should the effects of the Fresh & Bright coupon drop be reflected in the income statement? 7. What are the necessard journal entries? Analysis Analysis of Issue 1: What is the accounting issue(s)...
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...non-specific events on business processes identified during the work flow analysis. * The impact of legal and regulatory requirements. * An estimate of the maximum allowable downtime (MAD) and the associated acceptable level of losses for the identified business processes. * An estimation of recovery time objectives (RTOs), recovery point objectives (RPOs) and recovery of the critical path (those business processes or systems that must receive the highest priority during recovery.) (Laughery, 2011) The main operation of Omega is selling services to customers. These services are to find the appropriate consultants and resources and to supply their customers with these resources as quickly as possible. If there are any disruptions in these operations or outages of equipment, Omega will lose money each day and pay large penalties. The operating processes run on a SAP system in an AIX environment. The processes include finding resources for customers, scheduling, invoicing, paycheck distribution, and managing the treasury and short-term funding. If any part of the SAP system has an outage, Omega basically has a two day window to restore the system without borrowing money which would lead to increase in costs and overhead. The only operations that have a workaround are payroll and the audit and compliance areas. As Reyes Emme mentioned an interview, “by self insuring payroll funding for a week to ten day period, Omega can provide estimated payroll and then rectify many issues once...
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...MEMORANDUM To: Markway Inc. directors CC: Stakeholders From: ************ Date: 21 January 2013 Re: Training and system rollout plan Two-day Training Budget Markway’s has given the preliminary go-ahead on the two-day training session, but a budget must be made up to get the final approval. The training session is needed to avoid any type of lawsuits or fines that can form profit loss to the company. To determine the cost of the two-day training system, many factors must be considered. A work breakdown and budget report should first be develop to determine any needed cost for the budget. Markway budget plan will justify the needed cost for the two-day training session, to effectively measure the company’s investment in training employees. Phrase 1 Budget Plan A step-by-step budget plan must be configured before Markway can train employees that is needed to make the new system rollout successful. In order for the two-day training program to succeed, the budget plan must be redeem effective, efficient, and productive. To propose a budget to Markway Inc., calculating the individuals that needs to be hire, should be calculated. The number of trainers needed for the training session is calculated by the employees that are attending. Researching the company logs, the number of employees attending training is approximately 90. Calculating the number employees attending, the needed number of trainers that should be hire is 6. That will give each trainer an equal number...
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...PDES1155 –Materials Technology | Process Selection Assignment | Garden Spade | mn13er 8/3/2012 | Sketches of Components and Statement of Materials Component 1 – Handle From the Materials Selection Assignment, I identified that the mpst suitable material for the Handle to be made from would be PVC due to it having a relatively high young’s modulus, a very low price and it being lightweight. Component 2 – Shaft For the shaft, the most suitable material identified for it to be made from would be Oak due to its price, and leightweight characteristics as well as it having a relatively high young’s modulus. Component 3 – Blade CES Edupack identified silicon carbide to be the most suitable material for the blade to be made from due to it having wear and corrosion resistant parts, as well as a high young’s modulus. Estimates of Component Dimensions In the materials selection assignment, I conducted some research into the average measurements of spade components. From this I got an idea of some measurements I could use for my spade.You need to state your assumptions and show your working where you have calculated these. Component 1- Handle The average dimensions of a garden spade handle is 20cmx12cmx6cm (HxWxD) Component 2 – Shaft The average length of a garden spade shaft is 690mm Typically shafts are oval or circular hollow sections and a typical diameter value would be 29mm reflecting the interaction of the hand gripping the shaft...
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...since we are more interested in forecasting. The output for these methods returned almost identical results for every fund so we used the average of the two as our estimated beta. There were three exceptions – the last three assets (TIDRX, TIKRX, and TIQRX). We felt that there might not have been a large enough sample set to get an accurate result from the same type of analysis, so we defaulted to the historical figures calculated by Yahoo Finance for these three assets. Next, we considered alpha. We strongly feel that markets are efficient and any estimation of alpha for use to identify under or overvalued assets – in essence to beat the market – is an analytical mistake. Therefore we assumed a zero value for alpha for each fund. Another problem we faced was whether to use all data included or to achieve consistency in time durations and use only the last four years of data. We decided that the opportunity cost of not using every resource was too great to over look. Thus, we sacrificed consistency and used all...
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...minimize the expenses based on the estimated sales to maximize profit. The budgeting system help to draw a better picture on the how much to spend on the materials especially on neoprene usage by estimating cost on monthly basis. In this case the company production cost are different in two seasons as the cost of full fall suit averaged about $100 as for the spring line it was about $60. The $40 different will affect the cost estimation significantly. Question 2 The budgeting process began in November by estimating the sales growth and then broken down the total sales by month and by product. Each department is requested to developed monthly projection of key expenses such as materials, salaries, legal expenses, etc. Russ consolidated, reviewed, and discussed them with his managers, suggesting changes if any. The budget was finalized by the end of December. Russ approved the budget himself. During the year the budget was used to monitor the performance as well as to detect early warning signals of problem areas by comparing actual performance on monthly basis. Question 3 Body Glove didn’t function effectively without the budgeting system. Its reputation was negatively perceived due to late delivery due to unbalancing the inventory stockouts and inventory carrying cost. This is due to the uncertainty demand in the market and the material supply. Question 4 The budgeting plan needs to go through the board of directors in order to minimized personal judgment and self-utility...
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...takeover, we reach a final value of $187.06 million, where synergy effects value is estimated to $19.4 million. However, in a pessimistic scenario the value of Pinkerton would be $141.51 million without any synergy effects. Taking the assumption of a 50/50 probability of either of the two scenarios might occur (in lack of better information); we reach an estimated value of $166.28 million. We recommend that Wathen bid the $100 million, by raising $75 million debt and $25 million equity. Wathen (CPP) should bid on Pinkerton, as our estimated value of a merger exceeds the cost. However, Wathen has insufficient solvency to finance the entire bid with debt, and should thus choose the other option with 75% debt financing. An overview of the valuation, when using the $75 million debt to finance the bid can be seen in exhibit 1. By estimating Pinkerton’s future cash flow, we have taken the task force prediction and estimation into account when calculating...
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...Danle Corporation – Case 10-5 Discuss whether you believe that the conclusion reached by Danle to omit disclosure regarding to the class-action litigation was appropriate for the year ended December 31, 2009. In our opinion, it was not appropriate for Danle Corporation to omit disclosure relating to the class action lawsuit for the year ended December 31, 2009. First, it must be noted that ASC 450-20-25-2 indicates the following: 25-2 An estimated loss from a loss contingency shall be accrued by a charge to income if both of the following conditions are met: a. Information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements. Date of the financial statements means the end of the most recent accounting period for which financial statements are being presented. It is implicit in this condition that it must be probable that one or more future events will occur confirming the fact of the loss. b. The amount of loss can be reasonably estimated. In this case, management does not believe that it was probable that a loss would occur and does not believe that the amount could be reasonably estimated, however, ASC 450-20-50-3 states the following: 50-3 Disclosure of the contingency shall be made if there is at least a reasonable possibility that a loss or an additional...
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...percentage-of-completion method, and pension and warranty expenses. Specific Issue: Estimates The specific issue regarding estimates is that auditors have responsibility to review and assess the appropriateness of the client’s significant accounting estimates. As the auditor completes the audit, review activities are conducted to ensure that the client’s financial statements are materially correct and to ensure high audit quality. The auditor is responsible for evaluating the reasonableness of accounting estimates made by management in the context of the financial statements taken as a whole. Since estimates are based on subjective as well as objective factors, it may be difficult for management to establish controls over them. Even when management’s estimation process involves competent personnel using relevant and reliable data, there is potential for bias in the subjective factors. Hence, during planning and performing procedures to evaluate accounting estimates, the auditor should consider the issue with an attitude of professional skepticism for both the...
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...M International (“M”) and W Inc. (“W”) were involved in a class-action lawsuit regarding a patent infringement. W filed the original claim against M in May of 2007 and the lawsuit continued through the end of February 2011. Since the case is a timeline of facts, some aspects were difficult to determine and assumptions needed to be made. I can only imagine the amount of trouble a company has to go through to typically deal with this kind of an issue, since a lot is left to interpretation. According to ASC 450-20-25-1, “When a loss contingency exists, the likelihood that the future event or events will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote.” Thus, M is dealing with a loss contingency because management determined the loss from the claim would be probable at December 2007. Moreover, the loss should be accrued due to ASC 450-20-25-2, since the “amount can be reasonably estimated” and “information is available before the financial statements are issued.” In reference to the actual amount that should be recorded, the case states a range of the estimated loss from $15 to $20 million dollars, $17 million being the most probable. In deciding which amount to record at December 31, 2007, Accounting Standards must again be referenced. ASC 450-20-30-1 states, “If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, that amount shall be accrued.” Given...
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