Colin Drury, Management and Cost Accounting Boston Creamery Boston Creamery Professor John Shank, The Amos Tuck School of Business Administration Dartmouth College This case is reprinted from Cases in Cost Management, Shank, J. K. 1996, South Western Publishing Company. The case was prepared by Professor John Shank from an earlier version he wrote at Harvard Business School with the assistance of William J. Rauwerdink, Research Assistant. This case deals with the design and use of formal
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Excello Telecommunications: Profit at a Price There are moments in life that can forever define and potentially change not only an individual but an entire corporation as well. With the fiscal year of 2010 coming to a close, Terry Reed the operating CFO of Excello Telecommunications faced such a dilemma. For the first time, Excello was on track to finish out the year below anticipated financial goals, which would resonate throughout the company and its’ stock. This presented Excello with the
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In 2002 the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) met and issued the Norwalk Agreement where they both agreed to develop of high quality accounting standards. Since that time the FASB and the IASB have been working on joint projects a.k.a convergence projects designed to improve both US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS), eliminate differences between them, and ultimately
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jurisdiction currency so that there is fair accounting and the accounts are prepared according to standards. Body: IAS 21 “The Effects of Changes in Foreign Exchange Rates” International accounting standard on foreign currency deals with the study of foreign exchange risks faced by a company. An entity must report their accounts in their home jurisdiction currency so that their accounts are prepared in accordance with the international standards on accounting. Standard does not allow the dual effect
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Based on a review of Exhibit 3, discuss how one would use interest rate-sensitivity gap information to estimate the impact of rising interest rates on the earnings of Norwest Corporation. Interest sensitivity gap is used to measure how the interest change will affect the asset sensitivity and liability sensitivity. Asset sensitivity or positive gap occurs when the interest sensitive asset and interest sensitive liability is greater than zero. However, liability sensitivity incur when interest sensitive
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Economics Fall 2014 PART I: FUNDAMENTALS OF MANAGERIAL ECONOMICS QUESTIONS 1-4: 1. What are her yearly accounting costs of running the club? Answer: D) $200,000 2. What are her total opportunity costs of running the club? Answer: G) $250,000 3. How much revenue from club memberships would she minimally need to earn to start making positive (non-negative) accounting profits for the club? Answer: G) None of the above 4. How much revenue from club memberships would she minimally
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Scientific Necessity Differentiate between a positive and normative accounting theory * Positive Theory seeks to explain and predict particular phenomena * Focuses on relationships between various individuals and how accounting is used to assist in the functioning of these relationships * Normative Theory prescribe how a particular practice should be undertaken Identify the origins of Positive Accounting Theory (PAT) * Assumption: All individual action is driven by self-interest
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engineering, disassembly, or decompilation of the Programs, except to the extent required to obtain interoperability with other independently created software or as specified by law, is prohibited. The information contained in this document is subject to change without notice. If you find any problems in the documentation, please report them to us in writing. This document is not warranted to be error-free. Except as may be expressly permitted in your license agreement for these Programs, no part of these
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products. This real-world case presents financial reporting issues around the commodities cost shifting strategy used by Diamond’s management to falsify earnings. By delaying the recognition of a portion of the cost of walnuts acquired into later accounting periods, Diamond Foods materially underreported the cost of sales and overstated earnings in fiscal 2010 and 2011. The primary learning goal of the case is to help students understand the anatomy and motivations of earnings manipulation. Specifically
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1) Discuss the differences between historical cost and current replacement cost basis of measurement as applied to assets Historical cost: This is the method of reporting assets /liabilities of an entity at the price at which they were originally acquired. The historical cost has the disadvantage of not necessarily representing the actual fair value of an asset, which is likely to diverge from its purchase cost over time. The historical cost concept is clarified by the cost principle, which states
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