...5 Cost Allocation and Activity-Based Costing Systems L E A R N I N G O B J E C T I V E S After studying this chapter, you will be able to 1. Explain the major purposes for allocating costs. 2. Explain the relationship between activities, resources, costs, and cost drivers. 3. Use recommended guidelines to charge the variable and fixed costs of service departments to other organizational units. 4. Identify methods for allocating the central costs of an organization. 5. Use the direct, step-down, and reciprocal allocation methods to allocate service department costs to user departments. 6. Describe the general approach to allocating costs to products or services. 7. Use the physical units and relative-sales-value methods to allocate joint costs to products. 8. Use activity-based costing to allocate costs to products or services. 9. Identify the steps involved in the design and implementation of activity-based costing systems. 10. Calculate activity-based costs for cost objects. 11. Explain why activity-based costing systems are being adopted. 12. Explain how just-in-time systems can reduce non-value-added activities Cost Accounting System. The techniques used to determine the cost of a product or service by collecting and classifying costs and assigning them to cost objects. A university’s computer is used for teaching and for government-funded research. How much of its cost should be assigned to each task? A city creates a special police unit to investigate a series...
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...Jane “Bitzi” Johnson Miller is a leading candidate for the post of the Governor of Texas. Bitzi, as she is fondly known, comes from one of the most famous political families in the state; therefore, she is not a stranger to many residents. She is the granddaughter of Joe “Big Daddy” Johnson, a conservative Republican who served as the Governor of Texas between 1954 and 1958. Apart from that, Bitzi is the cousin to Mike Johnson, a Houston mogul who has built a real estate empire in the city. The Johnson family is well known within the social and economic circles in Texas. The Johnson Family Foundation is a philanthropy started by Joe Johnson, and Jane Johnson Miller recently served as its head of operations till she stepped down to focus on the...
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...“necessary” imply that an expense must be customary and helpful, respectively. Because these terms are subjective, the tests are ambiguous. However, ordinary is interpreted by the courts as including expenses which may be unusual for a specific taxpayer (but not for that type of business) and necessary is not interpreted as only essential expenses. These limits can be contrasted with the reasonable limit on amounts and the bona fide requirement for profit motivation. 2. [LO 1] Is cost of goods sold deductible as a business expense for a business selling inventory? Explain. No. Under the return of capital principal, cost of goods sold represents a reduction in gross income rather than a business expense. For example, if a taxpayer sells inventory for $100,000 and reports a cost of goods sold of $40,000, the business’s gross income is $60,000 ($100,000 – 40,000) not $100,000. 3. [LO 1] Tom is an attorney who often represents individuals injured while working (worker liability claims). This year -Tom spent $50 on a book entitled Plumbing For Dummies and paid $500 to take a course on plumbing residences and rental housing. Can you imagine circumstances in which these expenditures would be deductible as “ordinary and necessary” for an attorney. Explain. “Ordinary” and “necessary” imply that an expense must be customary and helpful, respectively. Because these terms are subjective, the tests are ambiguous. However, ordinary is interpreted by the courts as including expenses...
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...depend on each other for achieving their goals. Consider how negotiation fits within the broader perspective of processes for managing conflict. Gain an overview of the organization of this book and the content of its chapters. Chapter Outline A Few Words about Our Style and Approach Joe and Sue Carter Characteristics of a Negotiation Situation Interdependence Types of Interdependence Affect Outcomes Alternatives Shape Interdependence Mutual Adjustment Mutual Adjustment and Concession Making Two Dilemmas in Mutual Adjustment Value Claiming and Value Creation Conflict Definitions Levels of Conflict Functions and Dysfunctions of Conflict Factors That Make Conflict Easy or Difficult to Manage Effective Conflict Management Overview of the Chapters in This Book Chapter Summary “That’s it! I’ve had it! This car is dead!” screamed Chang Yang, pounding on the steering wheel and kicking the door shut on his 10-year-old Toysun sedan. The car had refused to start again, and Chang was going to be late for class (again)! Chang wasn’t doing well in that management class, and he couldn’t afford to miss any more classes. Recognizing 1 2 Chapter 1 The Nature of Negotiation that it was finally time to do something about the car, which had been having numerous mechanical problems for the last three months, Chang decided he would trade the Toysun in for another used car, one that would hopefully get him through graduation. After classes that day, he got a ride to the nearby shopping...
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...Knoll Workplace Research Five Trends that Are Dramatically Changing Work and the Workplace By Joe Aki Ouye, Ph.D. Co-Founder and Partner New Ways of Working, LLC The Changing Nature of Work My wife, a manager at Hewlett-Packard, usually has a two minute commute—a thirty foot walk from the kitchen up to her office. She goes “to the central office” about once every other week, more to keep in touch socially rather than to formally collaborate. Although she only meets face-to-face with her globally-based team members about once per year, she has an audio conference with them weekly. As HP’s work force grows and becomes more global, she is a highly sought after manager. She has learned how to work with her distributed team, setting clear directions, communicating often and clearly, and, most importantly, creating activities to engender team trust and cohesion. Most workers today do not work like my wife; most still commute to and from traditional, centralized offices and work with teams in close proximity. Nevertheless, more and more of us are—or will be—working in both non-traditional ways and places, ranging from relying on adaptable furniture and hoteling desks at the central office, to satellite offices, offshore offices, and telework from home. According to a recent benchmarking study by our research consortium, The New Ways of Working, many organizations are formalizing “Alternative Workplace” programs that combine nontraditional work practices, settings...
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...Knoll Workplace Research Five Trends that Are Dramatically Changing Work and the Workplace By Joe Aki Ouye, Ph.D. Co-Founder and Partner New Ways of Working, LLC The Changing Nature of Work My wife, a manager at Hewlett-Packard, usually has a two minute commute—a thirty foot walk from the kitchen up to her office. She goes “to the central office” about once every other week, more to keep in touch socially rather than to formally collaborate. Although she only meets face-to-face with her globally-based team members about once per year, she has an audio conference with them weekly. As HP’s work force grows and becomes more global, she is a highly sought after manager. She has learned how to work with her distributed team, setting clear directions, communicating often and clearly, and, most importantly, creating activities to engender team trust and cohesion. Most workers today do not work like my wife; most still commute to and from traditional, centralized offices and work with teams in close proximity. Nevertheless, more and more of us are—or will be—working in both non-traditional ways and places, ranging from relying on adaptable furniture and hoteling desks at the central office, to satellite offices, offshore offices, and telework from home. According to a recent benchmarking study by our research consortium, The New Ways of Working, many organizations are formalizing “Alternative Workplace” programs that combine nontraditional work practices, settings and locations.1...
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...Article 8 1-2-2014 Review of Financial Intelligence for Entrepreneurs: What You Really Need to Know about the Numbers by Karen Berman and Joe Knight, with John Case. H. L. Vacher University of South Florida, vacher@usf.edu Recommended Citation Vacher, H. L. (2014) "Review of Financial Intelligence for Entrepreneurs: What You Really Need to Know about the Numbers by Karen Berman and Joe Knight, with John Case.," Numeracy: Vol. 7: Iss. 1, Article 8. DOI: http://dx.doi.org/10.5038/1936-4660.7.1.8 Available at: http://scholarcommons.usf.edu/numeracy/vol7/iss1/art8 Authors retain copyright of their material under a Creative Commons Non-Commercial Attribution 4.0 License. Review of Financial Intelligence for Entrepreneurs: What You Really Need to Know about the Numbers by Karen Berman and Joe Knight, with John Case. Abstract Berman, Karen and Knight, Joe, with John Case. Financial Intelligence for Entrepreneurs: What You Really Need to Know about the Numbers, (Boston MA: Harvard Business Press, 2008). 285 pp. ISBN 978-1-4221-1915-0. From “The art of finance (and why it matters)” (Part One) through “Creating a financially intelligent company” (Part Eight), Financial Intelligence for Entrepreneurs is an engaging explanation and appreciation of financial statements and financial ratios. Short, easily digested chapters; just-in-time boxes to introduce terminology; easy, direct, in-text calculations from bare-bones, hypothetical financial statements to illustrate concepts;...
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...|Internal Control and Accounting Systems (AQ2013) | |For use in the AAT Accounting Qualification | |A to Z Vehicle hire |Assessment book | Time allowed: Four months |AAT Level 4 Diploma in Accounting |QCF qual ref |SCQF qual ref |QCF unit ref |SCQF unit ref | |Internal Control and Accounting Systems |600/6892/9 |R324 04 |F/504/3353 |UD65 04 | |Notice to candidates | |All candidates must adhere to the terms and conditions specified for this assessment. | | | |Your report must be typed, completed and submitted for formal assessment within four months. Your assessment start date was recorded onto the assessment | |platform when you accepted the terms and conditions...
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...perform in terms of generating information about investment projects and allocating capital to these projects. A decentralized approach—with small, single-manager firms—is most likely to be attractive when information about projects is “soft” and cannot be credibly transmitted. In contrast, large hierarchies perform better when information can be costlessly “hardened” and passed along inside the firm. The model can be used to think about the consequences of consolidation in the banking industry, particularly the documented tendency for mergers to lead to declines in small-business lending. IN THIS PAPER, I TAKE UP the following question: How does organization design inf luence the process by which capital is allocated to competing investment projects? I contrast two basic organizational forms. The first is “decentralization,” in which small, single-manager firms choose between relatively few projects. The second is “hierarchy,” in which large firms with multiple layers of management evaluate many projects. The goal is to understand what projectlevel characteristics lead either decentralization or hierarchy to be the preferred design. This question can be given a concrete motivation. Over the last several years, there has been enormous consolidation in the banking industry, both in the United States and worldwide. This consolidation has been accompanied by widely voiced concerns that the resulting larger banks will lend less to small businesses, which are especially dependent on intermediaries...
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...Chinese e-commerce, Alibaba has ambitions of going international. Its initial strategy to bring Taobao abroad is clear: target Chinese users outside mainland China. As the mere description in Part 1, expanding to Korea with wholly owned model is the best way for a company like Alibaba. I think Alibaba’s main goal is maintaining their status in Asian by entering Korea. Alibaba’s intermediary model has replicability, which provides samples for other competitors to enter the industry, also increased their own competitors. It’s easy to enter the service industries with low barriers. Entering Korea could increase the popularity of Alibaba and bring more foreign capitals for them. With the international brand and huge capital’s help, Alibaba can beat new competitors easily. Moreover, with the China-South Korea Free Trade...
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...Economics-Mr. Doebbler-Chapter 6 Study Guide Chapter6: Consumer Behavior p. 116 AFTER READING THIS CHAPTER, YOU SHOULD BE ABLE TO: | 1 | Define and explain the relationship between total utility, marginal utility, and the law of diminishing marginal utility. | 2 | Describe how rational consumers maximize utility by comparing the marginal utility-to-price ratios of all the products they could possibly purchase. | 3 | Explain how a demand curve can be derived by observing the outcomes of price changes in the utility-maximization model. | 4 | Discuss how the utility-maximization model helps highlight the income and substitution effects of a price change. | 5 | Relate how behavioral economics and prospect theory shed light on many consumer behaviors. | 6 | (Appendix) Relate how the indifference curve model of consumer behavior derives demand curves from budget lines, indifference curves, and utility maximization. | If you were to compare the shopping carts of almost any two consumers, you would observe striking differences. Why does Paula have potatoes, peaches, and Pepsi in her cart, while Sam has sugar, saltines, and 7-Up in his? Why didn't Paula also buy pasta and plums? Why didn't Sam have soup and spaghetti on his grocery list? In this chapter, you will see how individual consumers allocate their incomes among the various goods and services available to them. Given a certain budget, how does a consumer decide which goods and services to buy? This chapter will develop...
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...experience, etc.), the highest paying jobs would be the most a.|prestigious.| b.|convenient.| c.|undesirable.| d.|easily learned.| ANS: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic TOP: Why Do Earnings Differ? KEY: Bloom's: Comprehension MSC: Suggested Quiz 2. Automated production methods are only attractive when they a.|are undertaken in heavily unionized sectors of the economy.| b.|reduce per-unit costs.| c.|replace workers.| d.|decrease labor productivity.| ANS: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic TOP: The Link between Productivity and Earnings KEY: Bloom's: Comprehension MSC: Suggested Quiz 3. The fact that some people will work hard to earn a lot of money while others will be content with much less income indicates that a.|worker preferences are an important source of earning differentials.| b.|economics ranks one set of worker preferences as more desirable than another.| c.|some people can be paid less for doing hard work while others have to be paid a premium for doing a similar task.| d.|skill levels of laborers are a minor consideration in wage rate determination.| ANS: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic TOP: Why Do Earnings Differ? KEY: Bloom's: Comprehension MSC: Suggested Quiz 4. Which of the following is most likely to reduce the nominal market wage in a job category? a.|The job requires employees to work the night shift from 11 p.m. to 7 a.m.| b.|The job is prestigious, and the work is quite interesting...
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...PAPER F6 TAXATION (UK) P R A C T I C E & R E V I S I O N K I T FA 2012 BPP Learning Media is the sole ACCA Platinum Approved Learning Partner – content for the ACCA qualification. In this, the only Paper F6 Practice and Revision Kit to be reviewed by the examiner: We discuss the best strategies for revising and taking your ACCA exams We show you how to be well prepared for your exam We give you lots of great guidance on tackling questions We show you how you can build your own exams We provide you with three mock exams including the December 2012 exam Our Passcard and i-Pass products also support this paper. FOR EXAMS IN 2013 First edition 2007 Seventh edition January 2013 ISBN 9781 4453 6646 3 (previous ISBN 9781 4453 7995 1) ebook ISBN 9781 4453 6949 5 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA www.bpp.com/learningmedia Printed in the United Kingdom by Polestar Wheatons Hennock Road Marsh Barton Exeter EX2 8RP All our rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd. We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination...
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...Under the income tax formula, a taxpayer must choose between deductions for AGI and the standard deduction. -The choice is between deductions from AGI and the standard deduction. * (T) An “above the line” deduction refers to a deduction for AGI. * (F) Because they appear on page 1 of Form 1040, itemized deductions are also referred to as “page 1 deductions.” -What is described are deductions for AGI. Itemized deductions are also known as deductions from AGI and appear on page 2 of Form 1040. * (T) Most exclusions from gross income are not reported on Form 1040. -Gifts and inheritances are two major exclusions not reported on Form 1040. * (F) Once TI (taxable income) is determined, the taxpayer must make a choice between itemizing or --claiming the standard deduction. -The choice must be made after determining AGI (not TI). * (F) The filing status of a taxpayer (e.g., single, head of household) need not be identified until after taxable income is determined. -The filing status is relevant in determining the amount of the standard deduction available. * (F) Kim, a resident of Korea, is a citizen of the U.S. Any income Kim receives from land he owns in Korea is not subject to the U.S. income tax. -Under the global system of taxation followed by the U.S., foreign-sourced income is subject to tax. Although Kim is not a resident, he is a citizen of the U.S. * (T) An decrease in the amount of a taxpayer’s AGI can increase the amount of medical expenses allowed as a...
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...records is imperative if any business is to succeed. You want to set up a system that is as simple as possible, yet acquires the necessary information to help you better manage the business. Over time, you will learn to read your financial reports so that at a glance you can determine how you are doing, and look at making changes which will correct those things that you are not comfortable with. Should I hire an accountant? This depends on what your skills, time availability, and complexity of the business you are starting. In general, most all business should be using the services of a tax advisor or accountant for some matters. The tax codes change rapidly, and keeping up with all the changes and provisions make it difficult to be a do-it-yourselfer in this area. You can do much of the work yourself, and then have an accountant review and make recommendations. Another approach is to use the services of an accountant to begin, and then take over aspects of the job as you are comfortable with it. You should evaluate your time, or the need to hire someone in-house, and determine whether it would be better for you to focus more attention on sales and marketing, where you can earn more for the company than you will pay for hiring a professional. Do you have the need for a full time employee to do the books, or would you...
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