calculate a cost price Cost-plus pricing - Set the price at your production cost, including both cost of goods and fixed costs at your current volume, plus a certain profit margin. For example, your widgets cost €40 in raw materials and production costs, and at sales volume, your fixed costs come to €40 per unit. Your total cost is €80 per unit. You decide that you want to operate at a 20% markup, so you add €20 to the cost and come up with a price of $80 per unit. So long as you have your costs calculated
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| Mike McElligott | 2/5/2013 | This case discusses the Rayovac Corporation and the opportunities associated with entering the North American Canadian market by means of rechargeable batteries. We must find out if Rayovac is a niche player, volume player, or a company that will remain with the status quo. | RAYOVAC CORPORATION: The Rechargeable Battery Opportunity RAYOVAC_____________________________________________________________________________ Rayovac is the third largest consumer
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COST ACCOUNTING Cost accounting means the process of collection of data, analyzing the data, summarizing and evaluating various alternative courses of action. Basically, the cost accounting information are commonly used in the financial accounting information. Also the accounting system and financial reports are not subjected to the rules and standards of accounts, like the general accepted accounting principal. Which leads to different application of cost accounting system in different
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GOLDEN AGRI RESOURCES LTD. background: Golden Agri is one of the worlds largest privately owned palm plantation companies. It was listed on the Singapore exchange securities trading ltd. in 1999. The companies primary activities include cultivating and harvesting of oil palm trees, processing the fresh fruit bunch into crude palm oil and palm kernel oil, and refining crude palm oil (CPO) into value added products such as cooking oil, margarine and shortening. Golden Agri aims to be the best
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Case study 4: Ryanair and the revolution in low-cost air travel The low-cost airline, pioneered by Southwest Airlines in the US, offers the passenger a ‘no-frills’ service at a lower price than the traditional service with food and entertainment which has been the mainstay of the major airline companies. The two companies which have developed the low-cost model most successfully in Europe have been easyJet and Ryanair. Both have enjoyed phenomenal growth, building market share at the expense of
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QUESTIONS 5-1 Product costs are likely distorted when a firm uses a volume-based rate if the plant has more than one activity in its operations and not all activities consume overhead in the same proportion. The more diverse the product mixes of the plant are in volume, sizes, manufacturing processes, or product complexities, the greater the cost distortions are likely to be in using a volume-based rate. Undercosting a product may appear to have increased the reported profit the product earned (assuming
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evaluating location alternatives: Locational cost-profit-volume analysis, factor rating, and center of gravity method. 1. LOCATIONAL COST-PROFIT-VOLUME ANALYSIS The economic comparison of location alternatives is facilitated by the use of cost-profit-volume analysis. The analysis can be done numerically or graphically. Procedure: 1. Determine the fixed and variable cost associated with each location alternative. 2. Plot the total-cost lines for all location alternatives on the same
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Points from chapter that should highlighted: Financial responsibility centres (revenue, expense (ECC, DCC), profit (GMC, IPC, BPC, CPC, Investment centre) and the organization of these centres Ratios or specific elements used for measure Transfer pricing (market-based (ideal method), marginal cost (rare and not extremely useful), marginal cost and lump-sum fee,full-cost / full-cost and mark-up (most widely used), negotiated (can lead to power struggles), dual-rate OVERVIEW
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C H A P T E R F I V E INTRODUCTION TO COST MANAGEMENT Activity-Based Costing and Management After studying this chapter, you should be able to . . . 1. Explain the strategic role of activity-based costing 2. Describe activity-based costing (ABC), the steps in developing an ABC system, and the benefits and limitations of an ABC system 3. Determine product costs under both the volume-based method and the activity-based method and contrast the two 4. Explain activity-based management (ABM)
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case volume, net operating revenues, operating income and operating cash flow from 2006 - 2008. Figure 1: Performance of the company in the last 3 years in unit case volume, net operating revenues, operating income and operating cash flow. Source: The Coca Cola Company annual review report, 2008. The below figure gives the revenue vs. operating profit for TCCC from 2002 – 2007. This indicates that in a period of 5 years they have almost doubled their revenue and operating profit margin
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