CHP3: .Predetermined MOH RATE = Total estimated MO-Cost/Total Estimated allocation base. .MOH allocated to a job = Predetermined MOH rate x Actual amount of allocation base. .Job costing uses applied (Allocated) MOH not Actual .Job Costing: reduces future cost, assess probability, bidding custom orders, prepare cost of goods sold .Step #1 – Estimate total manufacturing overhead for the year. This is a projected amount of manufacturing overhead you expect for all jobs worked on in the next year
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ACCOUNTING 603 FALL 2012 Tijuana Bronze Machining (TBM) As time goes by, it becomes clear to me that our competitors are crazy. Pumps are a major product in a big market for all of us, but with the prevailing price cutting mentality no one will be able to sell pumps profitably as long as we all are forced to match each other’s lower prices. I guess we should be grateful that competitors don’t play the same foolish game in valves and flow controllers. Even with the 12 ½% price increase, we
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Table of Contents 1. The Raymond Group – An Introduction.............................................................................2 2. Applications ........................................................................................................................5 2.1. FLUCTUATIONS IN RAW MATERIAL PRICES..................................................5 2.2. DECISION REGARDING LOCATION...................................................................7 2.3. Fixing of SALE price using
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overhead plus a profit component. Marginal costs prices cover incremental costs which typically refers to recovering only direct variable costs. 7.4 a. Cross subsidization or cost shifting refers to overcharging some insurers as compared for full costs while others are undercharged. Today cost shifting often covers governmental payers like Medicaid, Medicare. Payers faced with increased cost are demanding prices cover only true costs. 7.5 a. Target costing is a management strategy used by
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Introduction to Accounting and Finance - Guidelines for Costing data Note: If you have already produced costing information for your assignment – just use this document to check that your costs are realistic in relation to your selling price. These guidelines are optional and intentionally very general. Marginal Costing Statement / Income Statement On average, the Cost of Sales for footwear is 58-62% of the sales figure. Cost of sales is the best estimate of variable cost, as this will include
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difference affects the financial structure of the organization as well as its pricing and profits. The breakeven point in such organizations (in comparison with high variable cost organizations) is typically at a much higher level of output, and their marginal profit (rate of contribution) is also much higher. Variable Costs: A periodic cost that varies in step with the output or the sales revenue of a company. Variable costs include raw material,
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Describe fixed costs and give an example’’ - Blackboard 4 ‘’4. Describe semi-fixed or semi-variable costs and give examples’’ - Blackboard 4 ‘’5. Describe the concept of absorption of overheads’’ – Blackboard 5 ‘’6. Describe what is meant by marginal costs’’- Blackboard 5 ‘’7. Give two or more examples of ways in which a business might set the price of the products or services that it offers (you can include pricing based on the costs incurred by the business)’’ –Blackboard 5 P2 6
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structure of the existing (traditional) costing system? Evaluate the features of this system. Should Wilkerson abandon its overhead cost allocation system and make managerial decisions based on contribution margin (price less variable costs); thereby in effect using marginal costs rather than average costs? Note: only direct materials and direct labor costs are assumed to be variable here. 3. Compute revised product costs based on an ABC (activity-based costing) analysis. Interpret your findings
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Managing financial resources and decisions Part 1 Assignment 1 Task 1 Sources of finance for different businesses Different sources of finance are given for, old, large small etc organizations. Type | Cost | Payback Terms | Sizes | Advantages | Disadvantages | Personal Savings | No cost | None | | Easy, cheap | Risk of Loss | Friends & Family | Usually good rate or none | Very flexible | | Flexible, best value | Can create friction | Home Mortgages - Traditional or Seconds | 7-9%8-14%
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to a certain point that is the level accommodated by the available plant and equipment .Edwards J. D (1965)on the other hand gives two perspectives on fixed costs where direct costing treats fixed costs as period costs and are excluded from product costs. He goes on to note that depreciation is assumed fixed by direct costing but in the long run it is variable. The other perspectives noted by accounts who just measure and match revenue and expenses hence the definition and classification of fixed
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