able 8.5 Cuda Marine Engines, Inc. must develop the relevant cash flows for a replacement capitalinvestment proposal. The proposed asset costs $50,000 and has installation costs of $3,000.The asset will be depreciated using a five-year recovery schedule. The existing equipment,which originally cost $25,000 and will be sold for $10,000, has been depreciated using anMACRS five-year recovery schedule and three years of depreciation has already been taken.The new equipment is expected to result in incremental
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Contents 1:0 TO IDENTIFY THE RELEVANT CASH FLOWS TO EVALUATE THE PRODUCTION OF THE NEW SECURITY RIGHT 1 1.1 OPORTUMNITY COST 1 1.2 CASH FLOWS VS PROFIT 2 1.3 WORKING CAPITAL 2 1.3 OVERHEARDS 2 1.4 SUNK COST 2 2.0 A REPORT ON THE RECOMMENDATION IF THE PROJECT IS ACCEPTED OR REJECTED 3 3.0 TO CALCULATE THE NET PRESENT VALUE OF THE NEW PRODUCT USING GLOW PLC 3 4.0 TO CALCULATE THE INTERNAL RATE OF RETURN 4 5.0 TO WRITE A REPORT ON THE ADVISABILITY OF ACCEPTING THE CONTRACT AND ANY
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case is to illustrate the importance of understanding cost behavior in calculating the profit/contribution of the Craddock Cup. Within this context, the case asks whether the tournament should be continued, expanded or dropped. In addition, the case provides a vehicle to discuss allocation procedures and the concept of sunk costs. Finally, the case furnishes an opportunity to develop cost-volume-profit analysis within the context of relevant costs and revenues. Questions: 1. In determining whether
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Qualification number: 60069090 (Level 5 in Scotland) Title (and reference number) Level Credit value Learning outcomes The learner will… 1 Understand the cost recording system within an organisation Basic Costing 2 (Level 5 in Scotland) 8 (4 knowledge and 4 skills) Assessment criteria The learner can… 1.1 K 1.2 K 1.3 K 1.4 K 1.5 K 2 Be able to use the cost recording system to record or extract data 2.1 K 2.2 K 2.3 S Explain the nature of an organisation’s business transactions in relation to its accounting
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Super Project Case • What are the relevant cash flows that General Foods should use in evaluating the Super Project? In particular, how should management deal with such issues as o Test-market expenses? o Overhead Expenses? o Erosion of Jell-O contribution margin? o Allocation of charges for the use of the excess agglomerator? The relevant cash flows that General Foods should use in evaluating the Super Project are considered Incremental cash flows and are “the changes in the firm’s
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decision-making method that utilizes the concept of relevant costs. Under this method, the decision involves the following steps: (1) gather all costs associated with each alternative; (2) drop the sunk cost; (3) drop those costs that do not differ between alternatives; and (4) select the best alternative based on the remaining cost data ("All Business: Your Small Business Advantage", 2005). Incremental analysis is primarily used to decode costs associated with a particular project—buying or selling
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case is to illustrate the importance of understanding cost behavior in calculating the profit/contribution of the Craddock Cup. Within this context, the case asks whether the tournament should be continued, expanded or dropped. In addition, the case provides a vehicle to discuss allocation procedures and the concept of sunk costs. Finally, the case furnishes an opportunity to develop cost-volume-profit analysis within the context of relevant costs and revenues. Questions: 1. In determining whether
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created compulsory costs for a company pertaining to the promotion of environmental sustainability. Companies are now obligated to offset their pollution levels and any harmful bearings their corporate activities cause to the environment, as well as allocating some of their resources towards environmentally conscious activities such as recycling and waste management systems. Additionally, they must produce environmental reports disclosing all this information, creating further costs (Langfield-Smith
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ACCOUNTING FOR DECISION MAKING Relevant Costing SEMESTER 1 SESSION 2011/2012 UKM GSB MANAGEMENT’S DECISION MAKING PROCESS Considers both financial and nonfinancial information Financial information Revenues and costs Overall profitability Nonfinancial information Effect of decision on employee turnover Environment Overall image of company Relevant Costs and Revenues Whether particular costs and revenues are relevant for decision making depends
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continuous growth. I find on my study strategic management is very likely forward looking not like traditional cost accounting. Strategic management accounting is considering external factors like competitors and management accounting contributes not only strategy developing also critically evaluates the current strategy of any organisation. In addition, management accountant can assist to control costs by implementing activity based costing methods, offer competitive pricing, budgeting process etc. Also
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