machine products. The company has never sold to the outside population but has been long approached by others to do so. Because the cost of running this department are getting so expensive the company is now contemplating selling to the outside to help cover some of the rising cost. The Four Pools & Costs The R & D activities fall into four pools of costs and those are: Market Analysis=$1,050.000, Product Design=$2,350.000, Product Development=$3,600.000 and Prototype Testing=$1,400.000
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naturally and supply can changes based on growing conditions, they are a commodity, resulting in price fluctuations depending on demand and the health of the crop in a growing season. The commodity nature of these ingredients, effects the way in which cost are accounted for. In this small brewing company, the direct labor consists of eight employees that help with brewing and packaging process and two mangers responsible for production process. In the packaging process components to consider as direct
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Position Assessment Strategic position assessment: provides the basic information about the sources of value in the business and the drivers that create value in the business. The SPA should be done at two levels: The corporate level should focus on the value potential of the company’s portfolio of businesses. The unit level should focus on the value and drivers of the individual markets and products. Each business is assigned one for the five strategic objectives: 1. Divest: closed or sold
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Activity-Based Costing (ABC) method. ABC is a system had been practices in many organizations for being a tool to measures the cost and performance of the activities and the cost objects. Hence, the management should look into ABC system which uses to provide more accurate information for decision making in determining costs by cost object such as product, customer, and location and the cost pool of the company. 2.0 Keys Areas for Improvement According to Reuben Mark (2003), Colgate Palmolive has
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huge amount of pressure from internal and external sources. Despite the company’s large market share, the pressure from customers and rivalries leads to a lower profit margin. 2. What are the drivers of the average profitability of the Original Design and Manufacturing industry? There are several drivers which contribute to the average profit margin of the ODM industry. One of the factors is the
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taxes during the rush hour or ii) driving by plate numbers. Elasticity When discussing the following solutions we need to understand the concept of elasticity. How much will the quantity supplied and demanded change due to a change in the price/cost ? To decide which strategy to choose one needs to know about the elasticity of the, in this case, demand. A situation where the demand is elastic is when the demand changes with a changing in the price. An example is: * Driving a car to work
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the extent of globalisation in the industry and market ‐ Yip’s globalisation driver framework – the nature and extent of competition ‐ Porter’s five forces or the resource‐based framework – strategic groups The network of business environments national macro business environment national industry national market The firm global industry global market global macro business environment Yip’s globalisation drivers • Analyse which aspects of industries and markets are global and which are local
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-Examples of internal drivers for change (inefficiencies within the business) at CSP UK included: Poor delivery - rather than delivering steel to customers on time there were delays, leading to loss of business. Competitiveness - steel produced in the UK could be more expensive than from some other countries. High wastage - failing to make products right first time meant that they had to be reworked or scrapped. Low staff morale – employees were committed but were not motivated by the environment
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questions: Q1 How is activity-based costing (ABC) different from traditional costing? Q2 What are activities, and how are they identified? Q3 What process is used to assign costs in an ABC system? Q4 How are cost drivers selected for activities? Q5 What is activity-based management (ABM)? Q6 What are the benefits, costs, and limitations of ABC and ABM? These learning questions (Q1 through Q6) are cross-referenced in the textbook to individual exercises and problems. COMPLEXITY SYMBOLS The
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CASE ANALYSIS You have just been hired as a graduate accountant by Greenwood Industries, a company that manufactures electronic products. There are five divisions within Greenwood: Oaktree, which produces large-screen televisions; Gumtree, which produces sound systems, including hi-fi and digital radios; Pinetree, which produces video cameras; Cedartree, which produces kitchen accessories, and Birchtree, which produces electronic medical products. All divisions are standalone, with a manager
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