Students should be able to understand the thinking and systems of the business world. Understanding how the cost of a product is determined, as it moves through the manufacturing process, enables students to gain insight into how pricing decisions are made. They will be in a better position to determine whether a business is price gouging and can be an effective force in countering such behavior. Understanding budgeting systems enables one to properly manage a business and
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COSTING METHODS Costing methods for Super Bakery University of Phoenix ACC/561 December 19, 2011 Timothy W. Williams, Ph.D. Costing methods for Super Bakery Super Bakery is a virtual corporation created in 1990 by Franco Harris, developing a network of supply for “donuts and other baked goods aimed for the institutional food market” (Kimmel, et al, 2009, pg 867). According to Kimmel, et al (2009), “only the cores, strategic functions of the business are performed
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cost center ¾ Who are ETO’s customers? – the departments producing ICA, ICB, Capacitor, Amplifiers and Diodes ¾ Customers have to bear the cost of maintaining and operating ETO. ¾ Any signs of problems? 12 Main Questions ¾ Is the current costing system – using direct labor dollar as the single allocation base - adequate? Are there signs in the case that it is not? ¾ Why does the current system exist? ¾ As time has passed, which kind of testing within ETO is actually causing overheads
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6.Activity based costing/Target costing Mechanism for determining selling prices. It is a cost management tool. TATA tries to manufacture a car at Rs. 1 ,00,000. – is a typical example for target costing. 42. Stages of target costing 1. Determine the target price which customers will be prepared to pay for the product 2.Deduct a target profit margin fro the target price to determine the target cost 3. Estimate the actual cost of the product 4.If estimated actual cost exceeds the target cost
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Costing Methods: Super Bakery ACC 561 Costing Methods: Super Bakery, Inc. Super Bakery, Inc. has a strategy in place that is in place to add maximum value to the company all the while making investments that are minimal. The company initiated an outsourcing strategy; instead of a multifunctional organization by taking activities that were selling, manufacturing, warehousing, and shipping. The outsourced companies will be combined and this will
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Table of Contents 1. The Need for Pricing 2. Pricing Software Industry Products 3. Licensing 4. Pricing Discrimination 5. Bundling 6. Other Pricing Issues 7. Summary The Need for Pricing Pricing has far reaching effects beyond the cost of the product. Pricing is just as much a positioning statement as a definition of the cost to buy. Price defines the entry threshold: who your buyers are and their sensitivities, which competitors you will encounter, who you will
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Q3: Discuss the concepts of Financial Decision Measures, responsibility accounting, Profit & Investment centers, and highlighting examples relevant to each. • Financial Decision Measures Financial Decisions Financial Decisions are decisions that involve: (1) Determining the proper amount of funds to employ in a firm (2) Selecting projects and capital expenditure analysis (3) Sourcing funds on the most favorable terms possible (4) Managing working capital such as inventory and
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correct decisions. Traditional cost techniques cannot model the really needed expenditures for producing a product well. Because of this, some techniques were developed, which measure the relation between costs and cost originators in more complex correlations and not just with a simple quantity-cost relations. Beside the traditional techniques (actual costing, standard costing, normal costing, etc.) new methods appear. Among the others, these are: Activity-Based Costing, Target costing, Process
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Analysis………………………………………………………………4 Target Profit Analysis…………………………………………………………….5 The Margin of Safety……………………………………………………………..6 Degree of Operating Leverage…………………………………………………....6 Major Assumptions of CVP Analysis…………………………………………….7 Difference between Variable Costing and Absorption Costing………………………………………………………………7 Cost-Volume-Profit Relationship A. Cost Classification: 1. Variable Costs--variable costs are those costs that vary proportionately with changes in the level of activity
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APPLICATION OF COSTING TECHNIQUES IN HOSPITALITY INDUSTRY IN NIGERIA? (CASE STUDY OF YANKARI MASS TRANSIT CORPORATION) By Nwankwo Stephen c. TABLE OF CONTENTS 1.0 INTRODUCTION 1.1 Background of the assignment 1.2 Purpose/objectives of the assignment 1.3 Definition of the term 1.4 Historical background of the case study ABSTRACT The aim of the assignment is to find out the importance of using costing techniques
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