to the parent company particularly in reducing its costs. Having a low profitability or even a net loss does not necessarily mean that the decision of retaining the subsidiary is wrong. Separating the relevant costs from the irrelevant costs helps the parent company determine how the subsidiary can be a factor in its overall operation. We may not know, but continuing could most likely be the best decision. Identifying cost objects and cost drivers are essential in determining the price, profit
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COURSE TITLE: Cost Accounting COURSE NUMBER: EBA 213 PREREQUISITES: EBA 101, EBA 102 CREDIT HOURS: 3 DEVELOPER: Professor Simon Saltz LAST UPDATE: December 1,2003 COURSE DESCRIPTION: Cost accounting focuses on cost determination for manufacturers, products and services. This includes the establishment and maintenance of job order and process cost systems, and the classification of costs as product or
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ticket, the $100 save is more valuable to you than the $90 saving. 4 Because the price of a movie ticket is a cost the patron must pay explicitly, it tends to be more noticeable than the money that she would fail to earn by seeing the movie. As Sherlock Holmes recognised, it’s easier to notice that a dog has barked than that it has failed to bark. 5 You are wrong to suggest that the album cost you nothing. The astute economic thinker would know to ask the question ‘What would I otherwise have done with
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revenues and expenses would be called: A) a cost center. B) an investment center. C) a profit center. D) residual income. 2. Lanta Restaurant compares monthly operating results with a static budget prepared at the beginning of the year. When actual sales are less than budget, would the restaurant usually report favorable variances on variable food costs and fixed supervisory salaries? | |Food Costs |Supervisory Salaries
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different quality material from standard; Buying materials from a non-usual source due to urgency; Utilising different labour from standard; Price changes due to economic conditions; scarcity of supplies; Choosing to incur additional discretionary fixed costs; More (or less) overtime hours used than budgeted. 2. Efficiency/usage/quantity variances: Standard is out of date, set without due care; Inefficient use of material/labour, deliberate or otherwise; Poor supervision/equipment/maintenance.Changes in
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4-12. By using unit contribution margins, we only consider revenues and variable costs that are differential to our decision. While relying on unit gross margins would probably lead to incorrect decision because we take into account revenues and all costs, including both variable costs and fixed costs. However, some costs are not differential to our decision. 4-15. Nonfinancial factors in decisions to drop a product line include the effect on employees who work on that product line, the effect on
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standard motors accounted for large proportion of annual volume, and it was extremely competitive in the relevant market. Its production process was manufacturing a single type of motor in a long run. The problem for Siemens to operate during the initial period was high costs of their products against lower labour rates of its competitors, but the firm still made profit under pressure of reduce costs. After expanding its program, EMW found that it could be more profitable if it produced low volume customized
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MANAGEMENT AND COST ACCOUNTING MRB1022/MRC1023 Group Assignment – Case 5 AUBURN CIRCULAR CLUB PRO RODEO ROUNDUP AUBURN CIRCULAR CLUB PRO RODEO ROUNDUP 1. Yes, it was necessary for Shelley Jones to stipulate that she wanted a fund-raiser. Reasons: 1. Become the target / KPI for the fund raised. 2. Auburn Circular Club will be recognised by the community. 3. Contribution for the community. 4. Sense of responsibility for fund-raiser. 5. Ensure continuity of the rodeo
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Bill has assumed that Duo-Products' relevant range for fixed costs will remain constant even after planned expansion of production capacity. He has also assumed that there is just one breakeven point for the firm (by taking the average of the 3 products). He has also assumed that the sales mix will remain constant. Two other assumptions are that total revenue and total expenses behave in a linear manner over the relevant range. These 2 are standard when Cost Volume Profit analysis is carried out
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Bill has assumed that Duo-Products' relevant range for fixed costs will remain constant even after planned expansion of production capacity. He has also assumed that there is just one breakeven point for the firm (by taking the average of the 3 products). He has also assumed that the sales mix will remain constant. Two other assumptions are that total revenue and total expenses behave in a linear manner over the relevant range. These 2 are standard when Cost Volume Profit analysis is carried out
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