valves, connectors, and fixtures used in commercial and residential plumbing applications. Recently a senior manager walked into the cost accounting department and asked Nick Somner to tell her the cost of the D45 valve. Nick quickly replied, “why do you want to know?” Noticing that the manager appeared somewhat startled by this question, he explained, “The cost information you need depends on the decision you’re going to make. You might be thinking of increasing a scheduled production run of 3000
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Use the Overhead Cost Activity Analysis in Exhibit 5 and other data on manufacturing costs to estimate product costs for values, pumps and flow controllers. Based on the information in the case, the cost of valves is $39, the cost of pumps is $81 and the costs of flow controllers is $147. The breakdown of the analysis is below. Total Values Pumps Flow Controllers Manufacturing Costs Material Cost per Unit 16 20 22 Units per Month 7500 12500 4000 Material Cost per Month 120000
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provide 2 grounds of land free of cost for the construction. A Trainee Accountant has prepared an estimate on the basis of which he has advised that the contract should not be accepted at the price offered. His estimate was as follows: (Rs.lakhs) Land (3 grounds @20 lakhs per ground) | 60 | Drawing and design cost | 7 | Registration | 10 | Materials | | Cement and Sand (In stock at original cost) | 12 | Bricks and tiles (To
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usually bid for end-to-end product solutions, the EDD’s present cost system is fairly straightforward. The EDD’s cost system is based on the direct method of cost allocation. Service costs related to support departments are allocated directly to the user departments based on labor hours. The EDD now has the opportunity to bid on a potentially lubrative sub-assembly contract. The present accounting system is not able to differentiate the cost of different sub-assemblies. It is obvious to the management
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monitoring. Job costing is an accounting method used to assign product costs to custom products or services. In job costing, direct costs are traced and overhead costs are allocated to individual jobs. Sometimes defects occur in custom products. Defective units can sometimes be reworked. The costs for both spoilage and rework need to be accounted for, as does the cost of scrap that arises from production. This Chapter Addresses the Following Questions: How are costs assigned to customized goods and
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indicators. For the issues with Ferguson & Son, Tom Emory’s statement regarding not knowing if the accounting department’s reports would reflect a good or bad performance shows a lack of communication within the organization. It seems the accounting department and the business owners are not communicating well because the business owners are not being kept informed of how they are performing and accounting is unaware of the business reasons behind the expense fluctuations. This creates inefficiency
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Why do we choose this topic to study? Cost accounting isn't just for manufacturers anymore. Service organizations, while no tangible products, can control costs and gauge internal performance by using service-specific adaptations of traditional manufacturing cost techniques. These practices provide a consistent framework for analyzing business decisions and examining issues that are more important for service companies. Part I Manufacturing, Merchandising and Service Companies. There are
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Abstract In this essay I am a manager in an accounting department and would like to hire another managerial accountant. The CEO is not convinced, so I must convince him. Manager Report Accounting has two different purposes: the first is reporting for external users and other is for internal users like management. Because of this, accounting can be put into two different categories: financial accounting and managerial accounting. Financial Accounting gives us a view of the financial position of
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Propriety Audit Definition * Propriety audit stands for verification of transactions in the best interest of public, commonly accepted and standards of conduct. The term “propriety” has been defined as “that which meets the tests of public interest, commonly accepted customs, and standards of conduct, and particularly as applicable to professional performance, requirements of government regulations and professional codes”. * Instead of too much dependence on documents, vouchers and evidence
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week of Cost Accounting. This week, you learn what managerial and cost accounting are and how these relate and contrast to financial accounting. You then learn about the two basic forms of cost accounting—job order and process cost systems. Most importantly, you will consider ethical considerations within managerial and cost accounting. Your work this week is a critical foundation for the entire course. The first chapter presents a thorough orientation to managerial and cost accounting, including
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