Cost Methods Paper This week’s paper consists of writing about cost methods pertaining to Super Bakery, Inc. This paper will layout the strategies that the management of Super Baker, Inc. used, as well as discuss why management thought it was a good idea to an activity-based costing system into their business. The comparison of a job order cost system and a process order system will be analyzed to decide which would be the best fit for Super Bakery, Inc. Super Bakery, Inc. was founded by ex-National
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Activity Based Management A Summary Managerial Accounting Abstract Activity-based management (ABM) is an approach to management that directs the focus of cost managers towards activities analysis. Theoretically by concentrating on activities, this will increase the ability of management to control costs be improving efficiencies. Activity-based management (ABM) uses activity-based costing (ABC) information. ABM/ABC has been around for over 25 years and has
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Cost Allocation Problems Problem 1: The laboratory services department for Swank Medical Systems has $300,000 in direct costs during 2012. These costs must be allocated to Swank’s three revenue producing patient services departments using the direct method. Two cost drivers are under consideration; patient services revenue and hours of laboratory services used. The patient services departments generated $6 million in total revenues in 2012, and to support these clinical activities, they used
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Costing in Portuguese Telecommunications* Maria Major1, 2 and Trevor Hopper3 1 Departamento de Finanças e Contabilidade, ISCTE – Escola de Gestão, Av. das Forças Armadas, 1649-026 Lisboa, Portugal. 2 UNIDE Researcher. 3 Manchester School of Accounting and Finance, University of Manchester, Manchester, M13 9PL, UK. * The authors wish to thank Bob Scapens, Sven Modell, Salvador Carmona, Angelo Riccaboni, John Burns, Mahmoud Ezzamel, Caroline Lambert, Rui Vieira, Aldónio Ferreira, and other participants
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Month in a year | 12 | | | | | | | | | | | Monthly production and cost summary | | | | | | | Valves | Pumps | Flow Controllers | Monthly Total | | Monthly production | 7,500 | 12,500 | 4,000 | | | Runs | 1 | 5 | 10 | | | Monthly shipments, units | 7,500 | 12,500 | 4,000 | | | Monthly shipments | 1 | 7 | 22 | | | Manufacturing costs: | | | | | | Components | 4 | 5 | 10 | | | Material | $16 | $20 | $22 | $458,000 | | Labor
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custom model have been growing. Following is the company’s sales, production, and cost information for last year: Cello Standard Custom Sales and production volume in units 900 100 Unit Selling Price $600.00 $900.00 Unit costs: Direct materials $150.00 $375.00 Direct labor $180.00 $240.00 Manufacturing overhead* $135.00 $135.00 Total unit costs $465.00 $750.00 Unit Gross Profit $135
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Issues 1. (a) What would you tell Bates concerning her accounting needs? b) What businesses are being operated in the boatyard? c) What is the accounting impact of those businesses? 2. Future - What kind if accounting system is needed for the growth of the boatyard? Facts • Bates bought the boatyard using her savings and also a private mortgage • Bates realized the need for and adequate accounting system • Record on show just cash receipts and disbursements
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Management Accounting – Casemix Company Step One Allocate direct costs to products. | Coffee-maker | Hair-dryer | Food processor | Component costs | 8 | 10 | 11 | Direct labor cost | 6 | 12 | 9.6 | Direct cost/unit | €14 | €22 | €20.6 | Step Two Allocate indirect costs to different production departments 1. Calculate cost of one cost driver based on activity. Department | Activity | Cost (in€) | Cost driver | # of cost driver | Cost of one cost driver | | Machine
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1. What are the strengths and weaknesses of the target costing system? First, target costing originally starts with mangers estimate the cost that customers are willing to pay and how competitor will price the same products or services. (Cost Accounting. Page 545). In the Nissan case, customers are very knowledgeable because the customer demand requires more variations and model types of automobiles. This is a favorable market for Nissan. Nissan managers can set an expected profit margin because
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Target costing is a system of profit planning and cost management. The required features and performance of the proposed product are established. Then target costing determines the life cycle cost at which the product must be produced, to generate the firm’s desired level of profit. Given the product’s anticipated selling price (Cooper and Slagmulder,1999, p.166). Note that target costing is not a method for product costing , it is a technique for cost management. It was devised in Japan, where it is
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