The key principle of costing is to calculate the true cost of a product or service while pricing is determined by demand, market conditions and factors which influence pricing such as advertising, promotional activity and the ability to differentiate from competitive or alternative products and services. Costing is based on the simple principle of recovering cost. Cost are classified as Variable or Fixed. Variable costs are those costs which vary in direct proportion to output. For every
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‘ Sales controls : Objectives, process & difficulties * To ensure the achievement of sales and profit objectives * sales people sometimes pay inadequate attention as they are caught up in the maze of everyday activities - many related to individual sales personnel & customer problems – they neglect long term perspectives * To find out strengths and weaknesses, opportunities and threats to the organization. * To locate the defects and take corrective steps to improve
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The following Profit and Loss Statement for ‘Nursing Salaries and Supplies’ summarizes the cost variances of price, efficiency, and volume. From these variances a projected total loss of $6,730.00 was calculated; Nursing salaries being the primary cause for budget overage. “The following three major factors influence costs: input prices- evaluate what portion, if any, of that increase was controllable or avoidable, productivity of inputs- measuring productivity has become increasingly important
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company change its cost system? The both have 2 concern, better decision making and bigger bonuses. Lourdes concern that if she has better information she can make better pricing decision and do better sales planning. While Greg will have better info for making process improvement which can reduce the cost. the information they have might lead to production in larger batches and lesser shipment. if they make better decision making, this will lead to higher profits and larger bonuses
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Activity Based Cost Accounting 09 October 2015 The cost-allocation system Holly has been using allocates 90% of overhead costs to the standard cello because 90% of direct labor hours were spent on the standard model. How much overhead was allocated to each of the two models last year? Based on the activity based costing calculations overall overhead allocations are 67% to the Standard Cello, 33% to the Custom Cello. Discuss why this might not be an accurate way to assign overhead costs to products
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shareholders. Additionally, the presence of 2 out of 5 non-independent directors is unfavourable as it fails to include a mechanism which is protective of the rights of minority shareholders. Business Model and Strategy The company attempts to deliver low cost products to suit the needs primarily of the Jamaican market. The company imports the raw materials, add flavours and packages them for distribution
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Strategic cost analysis & management: Case Study Bill French Accountant Takeaways Bill French, aggregated BEP basic Sales volume Unit sales price (+) Sales revenue Unit var. cost (-) Total VC (=) Contribution margin (-) Fixed cost (=) Operating profit (-) Taxes (=) Net Profit after taxes Dividends (=) Net Profit 1 076 406 1,159 1 247 400 0,56 607 401 640 000 640 000 0 0 0 0 0 basic+ dividend 1 328 688 1,159 1 539 760 0,56 749 760 790 000 640 000 150 000 75 000 75 000 75 000 0 basic+ union 1
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profitability to be the most important criteria upon which to base a recommendation. In order to begin my analysis, I determined what an average package would look like for each customer. I then calculated the costs associated with each characteristic of a package, including weight, volume and area. In order to make a recommendation, I focused on four main alternatives: • Maintaining Status Quo • Contracting the whole warehouse to one customer • Maintaining all three customers
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Nursing Costs, Billing, and Reimbursement” including the relationship of the budget to the four major financial statements and GAAP principles. Compile an Operational Budget from the article “Hospital Nursing Costs, Billing, and Reimbursement” An operational budget for a hospital nursing department forecasts this unit’s contribution to the income statement (Gapenski, 2012, p. 234). The operational budget has volume assumptions, revenue assumptions, cost assumptions, and a pro forma profit and
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PERIOD AMOUNT -EXAMPLE= Yr 3 Yr2 Yr1 Amount (Yr3) % Amount (Yr2) % Sales $120000 $100000 $80000 $20000 20% $20000 25% Net Profit $ 12000 $ 8000 $10000 $ 4000 50% ($2000) (20%) -TREND PERCENTAGES= a type of horizontal analysis -identifying trends in the changes of percentages over a representative period (eg,
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