CLASSIFICATION OF COSTS: Manufacturing We first classify costs according to the three elements of cost: a) Materials b) Labour c) Expenses Product and Period Costs: We also classify costs as either 1 Product costs: the costs of manufacturing our products; or 2 Period costs: these are the costs other than product costs that are charged to, debited to, or written off to the income statement each period. The classification of Product Costs:
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Kenworth Motor Case Study 1 After read the case, I don’t believe that the OD consultant was quite prepared for the meeting. He only knew very little about Mr. Denton such as his title, and his job tenure and very tiny information about Kenworth Motos’ Seattle truck manufacturing operations. In addition, the OD consultant had no focused agenda of what he would say and do. Ultimately, the OD consultant did not plan anything for this meeting at all. Instead of being unprepared, and lack of information
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business all the machines and factory are for sale. The building itself will sit on 5 acres land and have a total of 10 vehicles associated with the company. The vehicles will contain 8 ready mix trucks, one hauling truck and one bulker truck. The total expense to purchase the factory is estimated at $1,086,742.30. The bank is ready to finance the loan at a 5.50% fixed rate of interest during a period of 5 years, which would result in the monthly installments of $20,758.04. The next stage is to acquire financing
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CGA-CANADA FINANCIAL ACCOUNTING: CONSOLIDATIONS & ADVANCED ISSUES [FA4] EXAMINATION June 2014 Marks Notes: 1. 2. 3. 4. 5. 6. 7. All calculations must be shown in an orderly manner to obtain part marks. Round all calculations to the nearest dollar. Narratives for journal entries are not required unless specifically requested. Assume a December 31 fiscal year end unless specifically stated otherwise. Assume all amounts are material unless directed otherwise. Assume all companies are public companies
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Revised Summer 2010 CHAPTER 7 PROFIT PLANNING Key Terms and Concepts to Know Profit Planning and Budgeting: Profit plan is the steps taken by the business to achieve their planned levels of profits. Budget is a quantitative plan for acquiring and using resources over a specific time period to achieve its goals and objectives. Budget is used for two distinct purposes: o Planning which is developing goals and preparing various budgets to achieve those goals o Control which involves
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her need to support her family of four children. As a sole parent she feels her options are limited. Her dilemma began just a few weeks ago. She had learned from Robert Drew, the internal auditor, that an employee had reported to him possible expense account abuses by one of the company’s most senior managers. Robert said that this employee had accompanied Dan Murphy, a senior vice-president, on many business trips. The employee said Murphy had some curious habits: When getting out of a taxi,
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The amount to be recorded should equal the present value of the minimum agreed lease payment. The rate is equal to the lessee’s borrowing rate. c. What expenses related to this lease will Lani incur during the first year of the lease, and how will they be determined? During the first year of the lease, Lani Company will incur interest expense and depreciation. In this case, the depreciation is based on the amount of capital used to purchase divided by the terms of the lease agreement. d. How
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no. xxx. Terms: a down payment of P xxx, and the balance was evidenced by a note payable in installments at the end of the month for five months. 7 Paid cash for the charge on delivery of the equipment, Pxxx. Charged to Miscellaneous Expense. 10 Hired carpenters to build chairs, tables and cabinets for the center and for the company’s office. Total cash paid amounted to Pxxx. 12 Bought a slightly used car for use in the center as a school service bus, P350, 000.00. A 50% down
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ended December 31, 2009. The balance sheet currently reads that there is a balance of $2,000 in the current tax liability account and $800 in the deferred tax liability account. Their income statement reads $2,000 in current tax expense and $200 in the deferred tax expense account. The management has identified two deductions for which tax law is not clear as to whether these tax positions should reduce the company’s tax liability for the year 2009. Management is confident that all other tax positions
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Colin Drury, Management and Cost Accounting – Berkshire Threaded Fasteners Company Berkshire Threaded Fasteners Company Professor John Shank, The Amos Tuck School of Business Administration Dartmouth College This case is reprinted from Cases in Cost Management, Shank, J. K., 1996, South Western Publishing Company. The case was adapted by Professor John Shank, with permission from the author from an earlier case written by J. P. Culliton, Harvard Business School. The case was originally set
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