Management Accounting – Casemix Company Step One Allocate direct costs to products. | Coffee-maker | Hair-dryer | Food processor | Component costs | 8 | 10 | 11 | Direct labor cost | 6 | 12 | 9.6 | Direct cost/unit | €14 | €22 | €20.6 | Step Two Allocate indirect costs to different production departments 1. Calculate cost of one cost driver based on activity. Department | Activity | Cost (in€) | Cost driver | # of cost driver | Cost of one cost driver | | Machine
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Ti-Tech’s high quality image and capabilities * The Company should have experience with similar products * Clear specification and job scopes * Contribution before S, G&A should be 20% of the selling price * Simple design and reliable cost estimates * Progress payments on labor and material (as applied). * Market area potential * Job allowing adequate delivery time. * Acquiring or developing a standard product line. * Opportunity to add a new capability to Ti-Tech’s
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PME601 WEEK THREE HOME WORK VIDEO ONE: The Project Management Office (PMO) The PMO has become an important part of the business process because they align project objectives and broader business goals. One of the most important rolls the PMO has is taking on the role of becoming the guardian of all project management intellectual property. Executives fight over control of the PMO so they can have access to all the intellectual property. In order for a company and senior executives to accept
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Company Case 1) The existing cost system allocates overhead based on each product’s proportion of direct labor costs. The rate per unit of direct labor cost is 300% for all product groups. This results in the following cost breakdowns: 2) When you use an activity based cost model the allocations are as follows: Product Profitablity analysis | | | | | Valves | Pumps | Flow Controllers | Direct Labor cost | 10.00 | 12.50 | 10.00 | Direct Material cost | 16.00 | 20.00 | 22.00 | Manfuacturing
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manufacturing costs to a product. It can be used in other ways to determine cost effectiveness, profitability for services rendered and how to estimate per hour billing rates. First some definitions: Standard costing – this is the more traditional way of applying overhead costs to products. Anything in the manufacturing process that can’t be easily and directly tied to each product is lumped into manufacturing overhead. To insure products are appropriately prices and accounting for in COGS
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financial expression of the project and should accurately reflect the costs of the proposed research/education/service program. The budget justification provides the sponsor agency and reviewers of the application with information such as why costs are programmatically necessary and how they are calculatced. Reviewers will analyze the financial data to determine if the proposed costs are allocable to the program, allowable under federal cost principles or non-federal sponsor guidelines (whichever is applicable)
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Week 2 Assignment from the textbook Nancy Schwartz ACC/400 February 1, 2016 Lee Kroll E17.15 Spear Custom Furniture uses an activity-based cost accounting system to apply overhead to production. The company maintains four overhead cost pools. The four cost pools, and their budgeted amounts for the upcoming period, are as follows: Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . $40,000 Materials handling . . . . . . .
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Propriety Audit Definition * Propriety audit stands for verification of transactions in the best interest of public, commonly accepted and standards of conduct. The term “propriety” has been defined as “that which meets the tests of public interest, commonly accepted customs, and standards of conduct, and particularly as applicable to professional performance, requirements of government regulations and professional codes”. * Instead of too much dependence on documents, vouchers and evidence
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Target costing is a system of profit planning and cost management. The required features and performance of the proposed product are established. Then target costing determines the life cycle cost at which the product must be produced, to generate the firm’s desired level of profit. Given the product’s anticipated selling price (Cooper and Slagmulder,1999, p.166). Note that target costing is not a method for product costing , it is a technique for cost management. It was devised in Japan, where it is
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1. The costs of activities that are classified as unit-level should be proportional to the number of units produced. 2. Batch-level activities are performed each time a batch is handled or processed, regardless of how many units are in the batch. 3. Product-level activities relate to specific products and typically must be carried out regardless of how many batches are run or units of product are made. 4. Activity-based management seeks to eliminate waste by allocating costs to products that
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