continuous growth. I find on my study strategic management is very likely forward looking not like traditional cost accounting. Strategic management accounting is considering external factors like competitors and management accounting contributes not only strategy developing also critically evaluates the current strategy of any organisation. In addition, management accountant can assist to control costs by implementing activity based costing methods, offer competitive pricing, budgeting process etc. Also
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Research Study Capital-Market Effects of Corporate Disclosures and Disclosure Regulation Christian Leuz Peter Wysocki June 26, 2006 Commissioned by the Task Force to Modernize Securities Legislation in Canada Christian Leuz Christian Leuz is currently the Professor of Accounting at the University of Chicago, Graduate School of Business. He is also the David G. Booth Faculty Fellow. Prior to this position, Professor Leuz was the Harold Stott Term Assistant Professor in Accounting at
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$300 000 Revenues Variable cost 30 000 50 000 120 000 200 000 (labour &supplies) Variable 5 000 2 000 5 000# 12 000 transportation Fixed 5 000 10 000 15 000 Transportation* Fixed costs (other)% 4 000 8 000 12 000 24 000 Allocated HQ cost 10 000 20 000 30 000 60 000 $54 000 $90 000 $167 000 $311 000 Total expenses ($4 000) $10 000 ($17 000) ($11 000) Surplus/(Deficit) #Nurses use their cars. *Fixed costs transportation are allocated based on the number of vehicles %Fixed costs (other) are allocated based
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determine the cost of a product related to the revenue it generates. The two common costing systems used in business are traditional costing and activity-based costing. Traditional costing assigns manufacturing overhead based on the volume of a cost driver, such as the amount of direct labor hours needed to produce an item. A cost driver is a factor that causes cost to incur, such as machine hours, direct labor hours and direct material hours. Activity-based costing allocates the costs of manufacturing
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1994 titled, “How Boeing tracks costs, A to Z.”, Robert J. Bowlby, the cost management manager at Boeing in Seattle at the time, explains how Boeing transitioned from a traditional job-costing system to a modified process costing system to accommodate this change in product focus. Bowlby explains the transition was catalyzed when two of Boeing’s departments, engineering and operations, informed the finance department that they weren’t getting the appropriate cost information to effectively manage
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trends in real costs and prices, volume, market share, cashflow and stewardship of | |the resources available to the business. | |More recently (1994) Professor Bromwich pointed out that adding the strategic perspective to traditional management accounting | |required the role of accounting to extend in two directions. First, costs need to be integrated into strategy through strategic cost | |analysis
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competitive in the relevant market. Its production process was manufacturing a single type of motor in a long run. The problem for Siemens to operate during the initial period was high costs of their products against lower labour rates of its competitors, but the firm still made profit under pressure of reduce costs. After expanding its program, EMW found that it could be more profitable if it produced low volume customized alternating current motors in small production runs. Thus, the firm changed
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operators are required to comply with proposed transactional price reallocations as well as the cost of acquiring contracts. These issues will have great negative impacts on our business as a telecommunication operator. These concerns are as illustrated below: a) Inquiry for further clarification as well as guidance b) Allocation of discount c) The basis for allocation d) Contract acquisition cost Checking on the feedbacks that have been provided by other telecommunication operators,
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under a simple job-costing accounting system. It accounts for distinct cost objects. For example, it produces unique and different products for its customers such as valves, pumps and flow controllers. Direct material and labor are directly charged to the product (based on production units) and indirect overhead costs are allocated using one cost pool, direct labor production run time at 300%. The problem with this simple cost accounting system is that the products they make consume a different amount
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Absorption: the sharing out of the costs of a cost center amongst the products which use the cost center. Account: a record in a double entry system that is kept for each (or each class) of asset, liability, revenue and expense. Accounting equation: an expression of the equivalence, in total, of assets = liabilities + equity. Accounting period: that time period, typically one year, to which financial statements are related. Accounting policies: the specific accounting bases selected and followed
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