cost to their respective activities. The cost assigned per activity is also assigned to respective products required for each activity. With traditional costing methods manufacturing costs are only assigned to goods that have been sold rather than accounting for nonmanufacturing costs. There are steps to activity-based costing: Identifying the cost of each activity and estimated the total cost and indirect cost Estimate the cost driver for each activity and the total quantity for each driver’s allocation
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different questions like: How will incomes and costs be affected if we still sell 1.000 units? But if you expand or reduce selling prices? If we expand our business in foreign markets? KEY WORDS: cost-volume-profit, marginal contribution, break-even, the equation method, the marginal contribution method, graphical method The cost-volume-profit is a necessary tool for forecasting also for management control. The method includes a number of techniques and methods of solving problems based on understanding
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AInternational Journal of Production Research, Vol. 46, No. 4, 15 February 2008, 1047–1069 Activity-based costing in flexible manufacturing systems with a case study in a forging industry K. REZAIEy, B. OSTADI*z and S. A. TORABIy yDepartment of Industrial Engineeing, Faculty of Engineering, University of Tehran, PO Box 11365/4563, Tehran, Iran zDepartment of Industrial Engineering, Faculty of Engineering, Tarbiat Modares University, Tehran, Iran (Revision received August 2006) The objective
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HEALTH FINANCIAL MANAGEMENT The Housekeeping Service department of Ruger Clinic, a multispecialty practice in Toledo, Ohio, had $100,000 in direct costs in 2007. These costs must be allocated to Ruger’s three revenue-producing patient services departments using the direct method. Two cost drivers are under consideration: patient services revenue and hours of housekeeping services used. The patient services departments generated $5million in total revenues in 2007, and to support these clinical
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Bryan Activity-based costing is the method of accounting which analyzes and identifies all of the activities performed on a product during production. It then assigns an indirect cost to the product with avoidance of direct cost to the activity. This accounting method helps allocate the cost of the product to the less arbitrarily in values as compared to the method of cost allocation. This method helps to reduce the products price. Cost accounting as it is also known was originally developed for
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Chapter 6 Cost-Volume-Profit Relationships Solutions to Questions 6-1 The contribution margin (CM) ratio is the ratio of the total contribution margin to total sales revenue. It can be used in a variety of ways. For example, the change in total contribution margin from a given change in total sales revenue can be estimated by multiplying the change in total sales revenue by the CM ratio. If fixed costs do not change, then a dollar increase in contribution margin will result in a dollar increase
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Management accounting is not new in any sense of the world. The origins of modern management accounting can be traced to the emergence of managed, hierarchical enterprises in the early nineteenth century (Johnson and Kaplan, 1987) [2]. The Industrial Revolution in the early nineteenth century resulted in the emergence of a factory system that dramatically changed the production process (Ashton, D., Hopper, T. and Scapens, R.W. 1991) [3]. This has created a new demand for accounting information. Market
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samya Alakhdar , Dr . Moade Shubita , NYIT –AMMAN –JORDAN FALL-2011. Key words :managerial accounting , cost accounting , CVP. o "USEFULNESS OF COST VOLUME PROFIT ANALYISI AS AMANGERIAL CONCEPT" 1 DR.MOADE SHUBITA "USEFULNESS OF COST VOLUME PROFIT ANALYISI AS AMANGERIAL Concept" By samya Alakhdar , Dr . Moade Shubita , NYIT –AMMAN –JORDAN FALL-2011. Key words :managerial accounting , cost accounting , CVP. TOPICS TO COVER: ABSTRACT INTRODUCTION
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Management Accounting | 15 Management Accounting and Decision-Making Management accounting writers tend to present management accounting as a loosely connected set of decision‑making tools. Although the various textbooks on management accounting make no attempt to develop an integrated theory, there is a high degree of consistency and standardization in methodology of presentation. In this chapter, the concepts and assumptions which form the basis of management accounting will be formulated in
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CHAPTER 2: MANAGERIAL ACCOUNTING & COST CONCEPTS Direct Materials (DM) + Direct Labor (DL) + Manufacturing Overhead (MO) Manufacturing Costs (MC)/Product Costs (PC)/ Inventoriable Costs (IC) DM + DL Prime Cost DL + MO Conversion Cost Basic Equation for Inventory Accounts Beginning Bal + Additions to Inventory = Ending Bal + W/drawals from Inventory Cost of Goods Sold (COGS) in a Merchandising Co. Beg. Inv + Purchases = Ending I + COGS COGS = Beg. Inv + Purchases – Ending Inv Cost of
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