Indian Accounting Standard (Ind AS) 2 Inventories Contents OBJECTIVE Paragraphs 1 SCOPE 2-5 DEFINITIONS 6-8 MEASUREMENT OF INVENTORIES Cost of inventories Costs of purchase 9-33 10-22 11 Costs of conversion 12-14 Other costs 15-18 Cost of inventories of a service provider 19 Cost of agricultural produce harvested from biological assets 20 Techniques for the measurement of cost 21-22 Cost formulas 23-27 Net realisable value 28-33
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Costing is superior to “traditional” costing methods. It has a better way of facilitates the delegation of the decision making for a company. It also helps the management set goals that all the mangers agree on. According to Fundamentals of Cost Accounting, “Activity-based costing (ABC) is a two-stage product costing method that assigns costs first to activities and then to the products based on each product’s use of activities”(Lanen, Anderson, Maher. 2011. P 319). While Traditional costing, is
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Break even sales Margin of safety percentage or margin of safety ratio = Margin of safety / Total budgeted or actual sales Degree of operating leverage = Contribution margin / Net operating income Cost-Volume-Profit (CVP) analysis is a managerial accounting technique that is concerned with the effect of sales volume and product costs on operating profit of a business. It deals with how operating profit is affected by changes in variable costs, fixed costs, selling price per unit and the sales mix of
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Date- 21th May 2012 You have been assigned as a leader of a cross functional team of internal consultants to your CEO and the Board for your company. Your company is faced with dwindling profit and constant chaos due to: 1. Intense competition from local competitors 2. New entrants from China/Vietnam with very low prices 3. Increasing inventory of great products which used to be fast moving 4. Lack of coordination with supply chain decisions and customer demand from CRM 5. Customers
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Chapter Ch t 1 The Changing Role g of Managerial Accounting in a y Dynamic Business Environment McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objective 1 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Define Managerial Accounting g g Managerial accounting is the process of Identifying Measuring Analyzing Interpreting Communicating information 1-3 Learning Objective 2
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Activity-based costing (ABC) is a costing method that first assigns cost to activities and then assigns them to products based on the products’ consumption of activities (Lanen, Anderson, & Maher, 2011). Activities are tasks that are required in order for a company to finish its product. ABC was first written about by Alexander Hamilton Church in 1901. He believed that overhead was the cost of different activities of production. He believed that in order to report accurate costs, all of the cost
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PRESTIGE TELEPHONE COMPANY . Assignment The purpose of this case is to give you an opportunity to exercise your CVP analysis skills in a mixed non-profit/profit service context. As the controller of Prestige Telephone Company, you have been asked for an analyses of the 1997 first-quarter operating results for Prestige Data Services (a fully-owned subsidiary) and possible alternative courses of action to improve performance of Prestige Data in the future. Write a memo to Mr. Rowe (President
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the PRM or Associate PRM exam. It is included for reference and explanation only.) 2002 saw an unprecedented number of corporate scandals: Enron, Tyco, Global Crossing. In many ways, WorldCom is just another case of failed corporate governance, accounting abuses, and outright greed. But none of these other companies had senior executives as colorful and likable as Bernie Ebbers. A Canadian by birth, the 6 foot, 3 inch former basketball coach and Sunday School teacher emerged from the collapse of
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French was well aware of his capabilities and took advantage of every opportunity that arose to try to educate those around him. Wes Davidson invitation to French to attend an informal manager’s meeting had come as some surprise to others in the accounting group. However, when French requested permission to make a presentation of some break –even data, Davidson acquiesced. The Duo-Products Corporation had not been making use of this type of analysis in its review or planning programs.
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Enron and Arthur Andersen Accounting Scandal The Enron accounting scandal resulted in a loss of reputation to Arthur Andersen which was a result of fraudulent financial statement reporting. Crimes discovered included irregular accounting procedures which could be turned in as fraud which involved Enron and Arthur Andersen as its accounting firm. They were found to have committed wire fraud, security fraud, making false statements to banks, creating several “independent” companies, called “Special-Purpose
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