Thomas G. Cucuzza Many companies have used activity-based costing (ABC) in onetime profitability studies to help them decide which products or customers to cut or keep. But ABC can be much more than a superior accounting technique that shows how much money individual products are really making or losing. When ABC is woven into critical management systems, it can serve as a powerful tool for continuously rethinking and dramatically improving not only products and services but also processes and market
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is to have a profitability level greater than those in the industry on the long run. He also described the cost leadership and the differentiation as the two types of competitive advantage a company can have, depending on the sources on which it is based on. In 1985, Professor Porter defined competitive advantage as the ability of adding value in the eyes of consumers, meaning the value perceived might be superior than the sum of the amount of costs related to the production processes. Subsequently
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Massachusetts Institute of Technology Theory: Lean Represents a “Hybrid” Approach to Organizing Interfirm Relationships • “Markets” (Armʼs Length): Lower production costs, higher coordination costs • • • Firm buys (all) inputs from outside specialized suppliers Inputs are highly standardized; no transaction-specific assets Prices serve as sole coordination mechanism • “Hierarchies” (Vertical Integration): Higher production costs, lower coordination costs • • Firm
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Chapter 8—Absorption and Variable Costing, and Inventory Management TRUE/FALSE 1. Variable costing and absorption costing income statements may differ because of their treatment of fixed factory overhead. ANS: T PTS: 1 DIF: Difficulty: Easy OBJ: LO: 8-1 NAT: BUSPROG: Analytic STA: AICPA: FN-Measurement | IMA: Performance Measurement | ACBSP: APC-27-Managerial Accounting Features/Costs KEY: Bloom's: Knowledge NOT: 1 min. 2. Inventory costs under variable costing include only direct materials, direct
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ch01 29. The set of activities that transforms raw resources into the goods and services of an organization is called: A. Value chain. B. Supply chain. C. Demand chain. D. Cost-benefit analysis. 30. Which of the following activities would not be considered a value-added activity? A. Production B. Marketing C. Accounting D. Distribution 31. Which of the following statements is false? A. In essence, the value chain and the supply chain are similar; each creates something for which the
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ever-growing market will cover the problem until customer demand grows to the point where the cars are purchased without so many incentives. But recently, all that was growing was GM inventories. A slowing economy and rising gas prices have scared car buyers from the new car lots, especially the sections with lowgas-mileage, full-size vehicles and SUVs. Not surprisingly, GM and other automakers have responded with discounted prices. For example, the average sticker on a Cadillac DeVille was $54,193, but the
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Qualification structure and syllabus CIMA Chartered Management Accounting Qualification 2010 December 2008 Contents CIMA now designs its qualifications in what we believe to be a unique way. Based on rigorous international primary research with all of our key stakeholders and involving the participation of over 6,000 individuals and organisations – members, students, employers (both existing and potential), CIMA tuition partners, universities and our examiner and marker team – we have designed
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analysis (VCA) is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.” 2. “Value chain represents the internal activities a firm engages in when transforming inputs into outputs.” Understanding the tool VCA is a strategy tool used to analyze internal firm activities. Its goal is to recognize, which activities are the most valuable (i.e. are the source of cost or differentiation
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8394d_c08.qxd 6/11/02 12:30 PM Page 345 mac62 mac62:1253_GE: Accounting for Inventories Inventories in the Crystal Ball Policy makers, economists, and investors all want to know where the economy is headed. For example, if the economy is headed for a slow-down, it might be prudent on the part of the Federal Reserve to cut interest rates or for Congress to consider a tax cut to head off an economic downturn. Information on inventories is a key input into various decision makers’
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hand-crafted touches and a great word-of-mouth reputation keep her products in high demand. Recently, Mei Po learned that the space next door was available to lease. The timing was right as she was looking to expand her business. But as she reviewed the loan application, she noticed that in addition to a business plan, she needed to prepare a one-year budget. Mei Po was taken aback. She planned her cash-flow month to month. How could she predict what would happen over the period of a year? It seemed
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