developing a flexible budget are first to identify the activity index and the relevant range of activity. The next step would be to identify the variable costs and determine the budgeted variable cost per unit of activity for each cost. The third step is to identify the fixed costs, and determine the budgeted amount for each cost. The fourth and final step is to prepare the budget for selected increments of activity within the relevant range. What information is found on a flexible budget report? A flexible
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whether the cost used in taking decisions is relevant or irrelevant, and to choose between the best alternative which obtain a higher operating income than the other. Methodology A descriptive analytical approach was taken to conduct this study. Source of information: Secondary source of information was taken in account to collect relevant information about the topic - Secondary: Books, Article, website, references, other study. Findings: Relevant cost Relevant costs is “The costs appropriate
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UK banana market 4.2 The retail price of bananas in Britain 4.3 UK banana imports 2002 – 2013 4.4 Changes in banana supply chain operations 4.5 The impact of supermarket price wars on producers 4.6 Producer prices vs costs of sustainable production 22 22 23 5 The market environment for bananas 5.1 Evolution of the global banana trade 5.2 Consolidation of retailer power and UK price wars 5.3 The impact of competition law on banana
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analyzed was cost behavior, which is how a specific cost reacts to change in activity levels. We also accounted for relevant costs. These costs eliminate any unnecessary data that has the potential to complicate the decision-making process for management. Data Analysis: Craddock Cup generates total revenue of $49,840 for 32 teams from registration fees, T-shirts, concessions, soccer clinic, and contributions. It is currently incurring a total expense of $53,538. However, the total irrelevant cost of $3
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9-40 Make or Buy; Strategy; Ethics (45 min) 1. An analysis of per unit and total costs for 32,000 units shows that the Midwest Division should purchase the parts for a saving of $15,440 ($575,040 - $559,600). Cost per unitTotal CostCost to purchase MTR-2000 from Marley Bid price from Marley$17.30$553,600 Equipment lease penalty [($36,000/12)x2]6,000Total cost to purchase$559,600 Cost for Midwest to Make MTR-2000 Direct material ($195,000/30,000)x1.087.02$224,640 Direct labor ($120,000/30
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examine the private benefits and costs of major provisions of the Act by investigating the cross-sectional variation in market reactions to the rulemaking events. Regression results are consistent with the hypothesis that shareholders consider both the restriction of nonaudit services and the provisions to enhance corporate governance costly to business. The results also show that Section 404 of SOX, which mandates an internal control test, imposes significant costs on firms. 1. Introduction In
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considerations are measurement issues. Financial measures, in particular, cost measures, are needed to evaluate alternate strategies on whether to introduce a new product or service line, to determine the appropriate sale price and the consequent market position for the firm’s product. Question 1) “Contribution” represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs. To compute profit contribution that can be earned by carrying
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ABDULLAHa*, MAHARJAN KESHAV LALLb AND KIMBARA TATSUOc a University Putra Malaysia b Hiroshima University c Hiroshima University ABSTRACT In a dynamic market, firms need to evolve from traditional to strategic purchasing which aims to reduce the cost of the purchase and that might imply standardization of components, delivery time and levels of inventory. This effort will usually include key suppliers as joint problem solvers and with these problem-solving models to work with; the firm’s attitude
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product (smartphone) Long-run average selling price for intermediate product (processor) Incremental costs in Division A (manufacturing cost) Incremental costs for completion in Division B (assembly cost) €300 €200 €120 €150 Recent Developments The manager of Division B made the following calculations: Selling price for final product Transferred-in costs (market) IncrementaI costs for completion Contribution (loss) on product Business Performance Management – HEC 2014-15 €300
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address those benefits as well as the potential drawbacks of such mentioned allocations, and if traditional cost accounting or activity based costing (ABC) would prove more relevant. ABC is being used in today’s businesses more often as it is an important aspect of manufacturing organizations, based on a “methodology that measures the cost and performance of activities, resources and cost objects” (Akyol, Tuncel, and Bayhan, 2005). So many factors go into the calculations of activity based costing
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