CHAPTER 5: ACTIVITY-BASED COSTING AND MANAGEMENT QUESTIONS 5-1 Product costs are likely distorted when a firm uses a volume-based rate if the plant has more than one activity in its operations and not all activities consume overhead in the same proportion. The more diverse the product mixes of the plant are in volume, sizes, manufacturing processes, or product complexities, the greater the cost distortions are likely to be in using a volume-based rate. Undercosting a product may appear to have increased
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case map provides only a partial list of relevant items from HBS Publishing. To explore alternatives, or for more information on the cases listed below, visit: www.hbsp.harvard.edu/educators Case Title Institution, HBSP Product Number, Length, Teaching Note Geographical and Industry Setting, Company Size, Time Frame Abstract, Key Subjects PART ONE: COST ACCOUNTING FUNDAMENTALS Chapter 1: The Accountant’s Role in the Organization Chapter 2: An Introduction to Cost Terms and Purposes Carver HBSP
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Introduction Wilkerson Company is in the business of manufacturing valves, pumps and flow controllers. Wilkerson is currently faced with declining profit margins relative to industry competitors. Severe industry wise price cuts in the pump business, which is Wilkerson’s major product line, has badly affected the company’s margins (Gross margin below 20% as against a planned gross margin of 35%). The firm has identified the need to investigate its costing mechanisms and determine their credibility comparable
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non-financial decision-making information to managers.[2] According to the Institute of Management Accountants (IMA): "Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems,and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy".[3] ------------------------------------------------- Scope, practice, and application[edit] The
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6.Activity based costing/Target costing Mechanism for determining selling prices. It is a cost management tool. TATA tries to manufacture a car at Rs. 1 ,00,000. – is a typical example for target costing. 42. Stages of target costing 1. Determine the target price which customers will be prepared to pay for the product 2.Deduct a target profit margin fro the target price to determine the target cost 3. Estimate the actual cost of the product 4.If estimated actual cost exceeds the target cost
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2 Scope, practice, and application * 3 Differences between financial accountancy and management accounting * 4 Traditional vs. innovative practices * 5 Role within a corporation * 6 Specific methodologies * 6.1 Activity-based costing (ABC) * 6.2 Grenzplankostenrechnung (GPK) * 6.3 Lean accounting (accounting for lean enterprise) * 6.4 Resource consumption accounting (RCA) * 6.5 Throughput accounting * 6.6 Transfer pricing * 7 Resources and
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A COMPARATIVE STUDY OF STANDARD COSTING SYSTEMS OF TWO COMPANIES CERTIFICATE FROM THE ORGANISATION TABLE OF CONTENTS Sr. No. | Chapter Name | Page No. | 1. | Acknowledgement | 5 | 2. | Preface | 6 | 3. | Objective and Introduction | 7 | 4. | A Brief about the two Companies | 8 | 5. | Standard Costing System | 12 | 6. | Findings | 15 | 7. | Conclusion | 17 | ACKNOWLEDGEMENT We owe much gratitude to all the people who have helped and supported us during the conduct
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from the sale of each unit of product by maximizing the difference between that product’s price and variable costs, or contribution margin. Under this pricing strategy, only variable costs, which increase with a higher sales volume and decrease with a lower sales volume, are considered; fixed costs are assumed to be constant over a range of sales levels and are thereby not factored in when determining prices. Since Wilkerson manufactures and sells three different products, we can use a sales-mix approach
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Background: Siemens Corporation is one of the world’s largest corporation focus on electrical and electronic products. The Electric motor works was the only factory survived after the War. At first, EMW mainly produced standard motors rather than customized motors, the market for standard motors was very competitive. The old strategy for Siemens for a very long time was producing a single-variety of motor to reduce cost and price aggressively. In spite of expanding the plant, EMW still cannot lower
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Towards a conceptual framework for strategic cost management - The concept, objectives, and instruments - Von der Fakultät für Wirtschaftswissenschaften der Technischen Universität Chemnitz genehmigte Dissertation zur Erlangung des akademischen Grades Doctor rerum politicarum (Dr. rer. pol.) vorgelegt von Ibrahim Abd El Mageed Ali El Kelety geboren am 11.01.1965 in El Menoufia - Ägypten eingereicht am: 14. Juni 2006 Gutachter: Prof. Dr. Uwe Götze Prof. Dr. Dr. h.c. Jürgen Bloech Prof. Dr. Peter
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