economy supply and demand can be at polar ends. During high demand times finding suitable substitutes is an issue as it can cause customer dissatisfaction. As they are in a high demand economic time currently they are looking for ways to be more cost management effective before the downturn occurs. We will analyze FHPC issues to determine which costing system would serve to improve both profitability and provide a strategy for a cyclical economy. 1. How would you classify FHPC in terms of size
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requires a short-term ROI target of 15%. This a fair measure of divisional profitability for a new project for Diversified Electronics. The new product is in a growth market and can expect a 10% increase in price every year which applies to price and costs except depreciation and land. RULES There are four ways to measure divisional performance – divisional income, Return on Investment (ROI), Residual Income, and Economic Value Add (EVA). Diversified Electronics currently uses the ROI measure. ROI
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estimating costs as well as tips for ensuring that your budgets meet the needs of your project or organisation. In the examples section we give actual examples of budgets and how they can be monitored. Why have a toolkit on budgeting? Budgeting is the key to financial management. The toolkit will help you plan, develop and use budgets effectively in your organisation. If you have a sound understanding of the principles of budgeting, you will be well on the way to sound financial management. If you
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monitor the forecasting every quarterly if not monthly because of the cost involved in it. Necessary changes should be made after forecasting it because strategic implementation is more necessary. Otherwise, forecasting will be of no use. We have also provided some recommendations for managing their capacity to equip themselves better in the high sales month and to get rid of the extra cost in the low sales month providing the cost effectiveness. TABLE OF CONTENTS Introduction----------------
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Week 4 Janet McGonagle 8.1 Consider the following 2001 data for Newark general hospital (in millions of dollar) | Static Budge | Flexible Budget | Actual Results | | | | | Revenue | $4.7 | $4.8 | $4.5 | Costs | 4.1 | 4.1 | 4.2 | Profits | 0.6 | 0.7 | 0.3 | A: Calculate and interpret the profit variance Profit variance = Actual Profit – Static Profit = $3000, 000.00 - $600,000.00 = $-300,000.00 The hospital is in the red of $300,000.00 less for profit than expected. (Unfavorable)
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into account. Specifically, the idea of sunk cost, opportunity cost, out of pocket, these ideas were never something I thought of that would affect the business. Understanding these concepts, I see now how I could have applied them to my previous job. Understanding the cost of maintenance from both a short and long term, previous purchases, all of these different cost now made more sense with what I was able to control, direct and indirect material cost. I began to see the bigger picture of what it
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on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion? Dell’s strategy “combines its direct customer model with a highly efficient manufacturing and supply chain management organization, and an emphasis on standards-based technology” (Dell, 2005, p. 1). The purpose of Dell’s multifaceted strategy is to be efficient when it comes to manufacturing products and effective when it comes to providing services. Dell feels
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Ridderstrale hoped to achieve this by transforming the existing cost system to gain better information on their manufacturing cost structure, as well as SG&A costs tied to servicing individual customers and orders. This will enable them to direct their resources better to customers with hidden profits and reduce efforts to service customers with hidden losses. Under the existing cost system, most sales, marketing and administrative costs were treated as a period expenses and remained unanalyzed. These
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CHAPTER 5 MANAGEMENT ACCOUNTING INFORMATION FOR ACTIVITY AND PROCESS DECISIONS TRUE/FALSE 1. Sunk costs are usually relevant costs for decision making. a. True b. False 2. An example of a sunk cost is the amount of a guaranteed contract that has not yet been paid. a b. False 3. Personal employee responses are not critical considerations for the business decision maker. a. True b. False 4. For decision-making, differential costs assist in choosing between alternatives.
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very hard time connecting these targeted individuals, and subsequently converting them to regular shoppers. However, since Nectar has their information in its database, Nectar can target them, yielding a much higher acquisition rate at a much lower cost. The Nectar network helps Sainsbury’s retain customers. Customers are more likely to be loyal to Sainsbury’s as a brand because they receive loyalty points in return for their purchases. Nectar’s loyalty program is more effective than a stand alone
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