ACCOUNTING (Relevant Costing and Standard Costing) Instructions: In separate sheet of paper, number your paper 1 to 120, and write the letters only (a,b,c,d, T, F) TRUE-FALSE STATEMENTS 1. Incremental analysis identifies the probable effects of management decisions on future earnings. 2. In making decisions, management considers only financial information because accounting is presented in financial context. 3. In incremental analysis, total fixed costs will always remain constant
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and maintenance costs seem to be climbing more rapidly than other department costs. The assistant controller has reviewed the operations of the R&M department and has concluded that the administrative procedures used since the early days of the department are outmoded due in part to the growth of the company. In the opinion of the assistant controller, the two major causes for the deterioration are an antiquated scheduling system for repair and maintenance work, and the actual cost to distribute the
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Absorption costing is defined as a method for accumulating the costs associated with a production process and apportioning them to individual products. This type of costing is required by the accounting standards to create an inventory valuation that is stated in an organization's balance sheet. A product may absorb a broad range of fixed and variable costs. These costs are not recognized as expenses in the month when an entity pays for them. Instead, they remain in inventory as an asset until such
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or trade off with our inventory and carrying costs without compromising customer satisfaction and reduce the risk of stock-out to just 98.5%. Problem: We would like to reduce the odds of running out of stock to only 1.5%. Two possible options can be utilized in order to achieve this objective. Option A - 25-Car per shipment at even intervals with safety stock held for production variation A fixed order of 25 cars per shipment provides cost savings of $5 per tonne. Moreover, our supplier
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equipment, which is in the last year of its depreciable life. Department N’s equipment is about half depreciated. Department C’s equipment is in the second year of its life. The budget prepared for each department in 2010 included the following costs, volumes, and overhead rates (given in millions of dollars): | A | B | C | Expected number of units | 73M | 73M | 55M | Fixed overhead | | | | General expense | $1.5M | $2.0M | $1.25M | Rent | $1.5M | $2.0M | $1.75M |
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circumstances. A fixed rate is a loan or mortgage with an interest rate that will remain at a predetermined rate for the entire term of the loan. A veriablle rate also called a adjustable rateis a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets. The loan may be offered at the lender's standard variable rate/base rate Assessment B: Decision Making Process Identify the steps in
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MBA-GENERAL Value addition through warehousing Definition - VALUE ADDITION The enhancement added to a product or service by a company before the product is offered to customers. Value addition refers to the additional value of a commodity over the cost of commodities used to produce it from the previous stage of production. The value added to any product or service as the result of a particular process. A broad definition of value addition is to economically add value to a product and form characteristics
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Activity-based Cost Management --An Executive’s Guide Gary Cokins John Wiley & Sons, Inc. Introduction The concept of Activity-based cost management was born from the belief that traditional costing systems have inherent limitations that do not accurately assign indirect and overhead costs in all situations. Managers that are familiar with their organization’s operations know that different products and services consume these costs in varying proportion, but traditional costing systems
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documentation required for global trade, specifying which parties are responsible for which documents. Determining the paperwork required to move a shipment is an important job, since requirements vary so much between countries. Two items, however, are standard: the commercial invoice and the packing list. INCOTERMS were created primarily for people inside the world of global trade. Outsiders frequently find them difficult to understand. Seemingly common words such as "responsibility" and "delivery" have
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DEPOSITORY INSTITUTION RESERVES * Any time there is an increase in reserves at the Fed, there is an increase in money supply. * The greater the uncertainty in the economy, the greater is bank management’s desire to hold excess reserves. * The higher the interest rate the Fed pays on reserves, the more likely the bank is to increase its holding excess reserves at the Fed. * Historically, the Fed has not paid interest on reserves. * Reserves can be transferred from one institution
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