1 TM 2-1 A. Cost classifications for: AGENDA: MANAGERIAL ACCOUNTING AND COST CONCEPTS 1. Financial statement preparation. 2. Predicting cost behavior. 3. Assigning costs to cost objects. 4. Making decisions B. Least-squares regression computations using Microsoft Excel. C. Cost of Quality.
2 TM 2-2 AN OVERVIEW OF COST CLASSIFICATIONS IN CHAPTER 2 Purpose of classification Preparing an income statement and balance sheet Predicting changes in cost due to changes in activity Assigning costs Making decisions Cost classifications Product costs Direct materials Direct labor Manufacturing overhead Period costs (nonmanufacturing costs) Selling costs Administrative costs Variable costs Fixed costs Mixed costs Direct costs Indirect costs Differential costs Sunk costs Opportunity costs
3 TM 2-3 MANUFACTURING COST CLASSIFICATIONS FOR EXTERNAL REPORTING COST CLASSIFICATIONS TO PREDICT COST BEHAVIOR To predict how costs react to changes in activity, costs are often classified as variable or fixed.
4 TM 2-4 VARIABLE COSTS Variable cost behavior can be summarized as follows: Variable Cost Behavior In Total Total variable cost increases and decreases in proportion to changes in activity. Per Unit Variable cost per unit is constant. EXAMPLE: A company manufactures microwave ovens. Each oven requires a timing device that costs $30. The cost per unit and the total cost of the timing device at various levels of activity (i.e., number of ovens produced) would be: Cost per Number of Total Variable Timing Ovens Cost Timing Device Produced Devices $30 1 $30 $30 10 $300 $ $3,000 $ $6,000
5 TM 2-5 FIXED COSTS Fixed cost behavior can be summarized as follows: Fixed Cost Behavior In Total Per Unit Total fixed cost is not affected Fixed cost per unit decreases by changes in activity (i.e., total as the activity level rises and fixed cost remains constant even increases as the activity level if activity changes). falls. EXAMPLE: Assume again that a company manufactures microwave ovens. The company pays $9,000 per month to rent its factory building. The total cost and the cost per unit of rent at various levels of activity would be: Number of Rent Cost Ovens Rent Cost per Month Produced per Oven $9,000 1 $9,000 $9, $900 $9, $90 $9, $45 TYPES OF FIXED COSTS Committed fixed costs relate to investment in plant, equipment, and basic administrative structure. It is difficult to reduce these fixed costs in the short-term. Examples include: Equipment depreciation. Real estate taxes. Salaries of key operating personnel. Discretionary fixed costs arise from annual decisions by management to spend in certain areas. These costs can often be reduced in the shortterm. Examples include: Advertising; public relations. Research; management development programs.
6 TM 2-6 A GRAPHIC VIEW OF COST BEHAVIOR $6,000 Total Variable Cost Total Fixed Cost $9,000 $3, Microwaves produced Microwaves produced RELEVANT RANGE If activity changes enough, fixed costs may change. For example, if microwave production were doubled, another factory building might have to be rented. The relevant range is the range of activity within which the assumptions that have been made about variable and fixed costs are valid. For example, the relevant range within which total fixed factory rent is $9,000 per month might be 1 to 200 microwaves produced per month.
7 TM 2-7 MIXED COSTS A mixed (or semi-variable) cost contains elements of both variable and fixed costs. Example: Lori Yang leases an automated photo developer for $2,500 per year plus 2 per photo developed. Equation of a straight line: Y = a + bx Y = $2,500 + $0.02X
8 TM 2-8 SCATTERGRAPH METHOD As the first step in the analysis of a mixed cost, cost and activity should be plotted on a scattergraph. This helps to quickly diagnose the nature of the relation between cost and activity. Example: Piedmont Wholesale Florists has maintained records of the number of orders and billing costs in each quarter over the past several years. Quarter Number of Orders Billing Costs Year 1 1st 1,500 $42,000 2nd 1,900 $46,000 3rd 1,000 $37,000 4th 1,300 $43,000 Year 2 1st 2,800 $54,000 2nd 1,700 $47,000 3rd 2,100 $51,000 4th 1,100 $42,000 Year 3 1st 2,000 $48,000 2nd 2,400 $53,000 3rd 2,300 $49,000 These data are plotted on the next page, with the activity (number of orders) on the horizontal X axis and the cost (billing costs) on the vertical Y axis.
9 TM 2-9 A COMPLETED SCATTERGRAPH Y $60,000 Regression Line $50,000 $48,000 Billing Costs $40,000 $30,000 $20,000 $10,000 $ ,000 1,500 2,000 2,500 3,000 Number of Orders X The relation between the number of orders and the billing cost is approximately linear. (A straight line that seems to reflect this basic relation was drawn with a ruler on the scattergraph.) Because a straight line seems to be a reasonable fit to the data, we can proceed to estimate the variable and fixed elements of the cost using one of the following methods. 1. High-low method. 2. Least-squares regression method.
10 TM 2-10 ANALYSIS OF MIXED COSTS: HIGH-LOW METHOD EXAMPLE: Kohlson Company has incurred the following shipping costs over the past eight months: Units Sold Shipping Cost January... 6,000 $66,000 February... 5,000 $65,000 March... 7,000 $70,000 April... 9,000 $80,000 May... 8,000 $76,000 June... 10,000 $85,000 July... 12,000 $100, August... 11,000 $87,000 With the high-low method, only the periods in which the lowest activity and the highest activity occurred are used to estimate the variable and fixed components of the mixed cost. Units Sold Shipping Cost High activity level, July... 12,000 $100,000 Low activity level, February 5,000 65,000 Change... 7,000 $ 35,000 Change in cost $35,000 Variable cost= = =$5 per unit Change in activity 7,000 units Fixed cost = Total cost - Variable cost element = $100,000 - (12,000 units $5 per unit) = $40,000 The cost formula for shipping cost is: Y = $40,000 + $5X
11 TM 2-11 EVALUATION OF THE HIGH-LOW METHOD $100,000 Y high level of activity Shipping Costs $80,000 $60,000 $40,000 low level of activity Variable Cost $5/unit $20,000 Fixed Cost $40,000 $0 0 2,000 4,000 6,000 8,000 10,000 12,000 Units Sold X The high-low method suffers from two major defects: 1. It throws away all but two data points. 2. The periods with the highest and lowest volumes are often unusual.
12 TM 2-12 LEAST-SQUARES REGRESSION METHOD The least-squares regression method for analyzing mixed costs uses mathematical formulas to determine the regression line that minimizes the sum of the squared errors.
13 TM 2-13 TRADITIONAL VERSUS CONTRIBUTION INCOME STATEMENT
14 TM 2-14 COST CLASSIFICATIONS FOR ASSIGNING COSTS TO COST OBJECTS COST OBJECT A cost object is anything for which cost data are desired. Examples of cost objects: Products Customers Departments Jobs DIRECT COSTS A direct cost is a cost that can be easily and conveniently traced to a particular cost object. Examples of direct costs: The direct costs of a Ford SUV would include the cost of the steering wheel purchased by Ford from a supplier, the costs of direct labor workers, the costs of the tires, and so on. The direct costs of a hospital s radiology department would include X- ray film used in the department, the salaries of radiologists, and the costs of radiology lab equipment. INDIRECT COSTS An indirect cost is a cost that cannot be easily and conveniently traced to a particular cost object. Examples of indirect costs: Manufacturing overhead, such as the factory managers salary at a multi-product plant, is an indirect cost of any one product. General hospital administration costs are indirect costs of the radiology lab.
15 TM 2-15 COST CLASSIFICATIONS FOR DECISION-MAKING DIFFERENTIAL COST Every decision involves choosing from among at least two alternatives. Any cost that differs between alternatives is a differential cost. Only the differential costs are relevant in making a decision. EXAMPLE: Bill is currently employed as a lifeguard, but he has been offered a job in an auto service center in the same town. When comparing the two jobs, the differential revenues and costs are: Auto Differential Life- Service costs and guard Center revenues Monthly salary... $1,200 $1,500 $300 Monthly expenses: Commuting Meals Apartment rent Uniform rental Sunscreen (10) Total monthly expenses Net monthly income... $ 560 $ 760 $200
16 TM 2-16 OPPORTUNITY COST An opportunity cost is the potential benefit given up when selecting one course of action over another. EXAMPLE: Linda has a job in the campus bookstore and is paid $65 per day. One of her friends is getting married and Linda would like to attend the wedding, but she would have to miss a day of work. If she attends the wedding, the $65 in lost wages will be an opportunity cost of attending the wedding. EXAMPLE: The reception for the wedding mentioned above will be held in the ballroom at the Lexington Club. The manager of the Lexington Club had to decide between accepting the booking for the wedding reception or accepting a booking for a corporate seminar. The hall could have been rented to the corporation for $600. The lost rental revenue of $600 is an opportunity cost of accepting the reservation for the wedding. SUNK COST A sunk cost is a cost that has already been incurred and that cannot be changed by any decision made now or in the future. Sunk costs are irrelevant and should be ignored in decisions. EXAMPLE: Linda has already purchased a ticket to a rock concert for $35. If she goes to the wedding, she will be unable to attend the concert. The $35 is a sunk cost that she should ignore when deciding whether or not to attend the wedding. [However, any amount she can get by reselling the ticket is NOT a sunk cost. And while she should ignore the $35 sunk cost, she should not ignore the enjoyment she would get if she were to attend the concert.]
17 TM 2-17 APPENDIX 2A: LEAST-SQUARES REGRESSION COMPUTATIONS Example: Montrose Hospital operates a cafeteria for employees. Management would like to know how cafeteria costs are affected by the number of meals served. Meals Served X Total Cost Y April... 4,000 $9,500 May... 1,000 $4,000 June... 3,000 $8,000 July... 5,000 $10,000 August... 10,000 $19,500 September.. 7,000 $14,000 Statistical software or a spreadsheet program can do the computations required by the least-squares method. The results in this case are: Intercept (fixed cost)... $2,433 Slope (variable cost)... $1.68 R The fixed cost is therefore $2,433 per month and the variable cost is $1.68 per meal served, or: where X is meals served. Y = $2,433 + $1.68X, R 2 is a measure of the goodness of fit of the regression line. In this case, it indicates that 99% of the variation in cafeteria costs is due to the number of meals served. This suggests an excellent fit.
18 TM 2-18 APPENDIX 2B: QUALITY COSTS The costs of correcting defective units before they reach customers are called internal failure costs. Examples: Scrapped units. Rework of defective units. Costs that are incurred by releasing defective units to customers are called external failure costs. Examples: Costs of fixing products under warranty. Loss of sales due to a tarnished reputation. The costs of internal and external failures can be avoided by: Preventing defects. Finding defective units before they are released. The costs associated with these activities are called prevention costs and appraisal costs, respectively. Generally, prevention is the best policy. It is usually far easier and less expensive to prevent defects than to fix them.
19 TM 2-19 EXAMPLES OF QUALITY COSTS
20 TM 2-20 TRADING-OFF QUALITY COSTS
21 TM 2-21 QUALITY COST REPORTS Quality cost reports summarize prevention costs, appraisal costs, internal failure costs, and external failure costs that would otherwise be hidden in general overhead. Managers are often surprised by how much defects cost. The report helps identify where the biggest quality problems lie. The report helps managers assess how resources should be distributed. If internal and external failure costs are high relative to prevention and appraisal costs, more should probably be spent on prevention and appraisal. Because quality cost reports are largely an attention-directing device, the costs do not have to be precise. Unfortunately, the cost of lost sales due to external failures is usually excluded from the reports due to measurement difficulties.
Types of Cost Behavior Patterns Cost Behavior: Analysis and Use Chapter Five Recall the summary of our cost behavior discussion from an earlier chapter. Summary of Variable and Fixed Cost Behavior Cost
Chapter 10: Dt Determining ii How Costs Behave Bh Horngren 13e 1 The Linear Cost Function y = a + bx The Dependent Variable: The cost that is being predicted The Independent Variable: The cost driver The
Part Three Cost Behavior Analysis Cost Behavior Cost behavior is the manner in which a cost changes as some related activity changes An understanding of cost behavior is necessary to plan and control costs
Cost Behavior and Cost Estimation 1 Types of Cost Behavior Patterns Summary of VC and FC Behavior Cost In Total Per Unit Total VC is VC per unit remains VC proportional to the activity the same over wide
Management Accounting 63 Management Accounting Theory of Cost Behavior Management accounting contains a number of decision making tools that require the conversion of all operating costs and expenses into
Exam 1 Chapters 1-3 Key 1. Which of the following should NOT be included as part of manufacturing overhead at a company that makes office furniture? A. Sheet steel in a file cabinet made by the company.
Chapter 2 Solutions Solution 2.1 a) Explain what you understand by the term 'cost' The term cost can be defined as 'the resources consumed or used up to achieve a certain objective'. This objective may
Chapter 18 Cost Behavior and Cost-Volume-Profit Analysis QUESTIONS 1. A variable cost is one that varies proportionately with the volume of activity. For example, direct materials and direct labor (when
UNIT2:- Session 1-3 :- Cost analysis for planning and decision making :- * Cost classification and approach :- A- Marginal costing :- - variable and fixed. - Variable cost is charged to the product unit.
Chapter 4 Accounting for Factory Overhead Learning Objectives LO1 Identify cost behavior patterns. LO2 Separate semivariable costs into variable and fixed components. LO3 Prepare a budget for factory overhead
1 Building Blocks of Managerial Accounting CHAPTER 2 2 Distinguish among service, merchandising, and manufacturing companies OBJECTIVE 1 3 Service Companies Provide an intangible service only Largest sector
1 ost ehaviour ost ehaviour 1 oncepts and definitions questions 1.1 istinguish between (iii) Financial accounting ost accounting Management accounting 1.2 State six different benefits of cost accounting.
What is a cost? What is an expense? A cost is a sacrifice of resources. An expense is a cost incurred in the process of generating revenues. Expenses are recorded at the same time that the associated revenues
Management Accounting 161 Incremental Analysis and Decision-making Costs Nature of Incremental Analysis Decision-making is essentially a process of selecting the best alternative given the available information
12 CHAPTER Managerial Accounting and Cost-Volume-Profit When asked by a marketing or production manager what a certain item or activity costs, the management accountant who asks Why do you want to know?
Chapter 25 Cost-Volume-Profit Analysis Questions 1. Cost-volume-profit analysis is used to accomplish the first step in the planning phase for a business, which involves predicting the volume of activity,
Brief Exercise 1-1 (15 minutes) 1. The cost of a hard-drive installed in a computer: direct materials cost. 2. The cost of advertising in the Puget Sound Computer User newspaper: selling cost. 3. The wages
Managerial accounting Concept of Cost COST definition and classifications In general, cost means the amount of expenditure (actual or notional) incurred on, or attributable to a given thing. However, the
Chapter 22 Helena Company reports the following total costs at two levels of production. 10,000 Units 20,000 Units Direct materials $20,000 $40,000 Maintenance 8,000 10,000 Direct labor 17,000 34,000 Indirect
Chapter 2 Cost Concepts and Behavior McGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives L.O. 1 Explain the basic concept of cost. L.O. 2 Explain
19 Cost-Volume-Profit Analysis Learning Objectives 1 Identify how changes in volume affect costs 2 Use CVP analysis to compute breakeven points 3 Use CVP analysis for profit planning, and graph the CVP
Financial Analysis, Modeling, and Forecasting Techniques Course #5710B/QAS5710B Course Material TECHNIQUES OF FINANCIAL ANALYSIS, MODELING, AND FORECASTING Delta Publishing Company Copyright 2011 by DELTA
Page 1 of 28 Module 4: Cost behaviour and cost-volume-profit analysis Required reading Chapter 5, pages 187-213 Chapter 6, pages 230-253 Appendix 6A, pages 256-258 Overview The way in which a cost responds
TM 3-1 AGENDA: JOB-ORDER COSTING A. The documents in a job-order costing system. 1. Materials requisition form. 2. Direct labor time ticket. 3. Job cost sheet. B. Applying overhead using a predetermined
Ray H. Garrison, Eric W. Noreen, Peter C. Brewer Managerial accounting Chapter One Managerial Accounting: An Overview 1 Chapter Two Managerial Accounting and Cost Concepts 24 Chapter Three Job-Order Costing
CHAPTER 10 In-Class QUIZ 1. A mixed cost function has a constant component of $20,000. If the total cost is $60,000 and the independent variable has the value 200, what is the value of the slope coefficient?
2.0 Chapter Introduction In this chapter, you will learn to use cost-volume-profit analysis. Assumptions. When you acquire supplies or services, you normally expect to pay a smaller price per unit as the
c04.qxd 6/2/06 2:53 PM Page 124 CHAPTER 4 LEARNING OBJECTIVES 1 2 3 4 5 6 Identify common cost behavior patterns. Estimate the relation between cost and activity using account analysis and the high-low
Management Accounting 51 Classification of Manufacturing Costs and Expenses Introduction Management accounting, as previously explained, consists primarily of planning, performance evaluation, and decision
Chapter 6 Cost-Volume-Profit Relationships Solutions to Questions 6-1 The contribution margin (CM) ratio is the ratio of the total contribution margin to total sales revenue. It can be used in a variety
Chapter 2 Job-Order Costing and Modern Manufacturing Practices QUESTIONS 1. Manufacturers need product costing systems in order to measure and record the cost of manufactured products. Product cost information
CHAPTER 22 Cost-Volume-Profit Relationships ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems * 1. Distinguish between variable and fixed costs.
Cost Concepts for Decision Making Relevant Costs for Decision Making A relevant cost is a cost that differs between alternatives. Chapter Thirteen 1 2 An avoidable cost can be eliminated (in whole or in
PRINCIPLES OF MANAGERIAL ACCOUNTING COURSE DESCRIPTION: Prerequisites: ACC 120 Corequisites: None This course includes a greater emphasis on managerial and cost accounting skills. Emphasis is on managerial
neifa edition John J. Wild University of Wisconsin at Madison Ken W. Shaw University of Missouri at Columbia McGraw-Hill Irwin 1 Managerial Accounting Concepts and Principles 2 Managerial Accounting Basics
COST & BREAKEVEN ANALYSIS http://www.tutorialspoint.com/managerial_economics/cost_and_breakeven_analysis.htm Copyright tutorialspoint.com In managerial economics another area which is of great importance
Accounting Building Business Skills Paul D. Kimmel Chapter Fourteen: Cost-volume-profit Relationships PowerPoint presentation by Kate Wynn-Williams University of Otago, Dunedin 2003 John Wiley & Sons Australia,
1. Managerial accounting: A. is governed by generally accepted accounting principles. B. places emphasis on special-purpose information. C. pertains to the entity as a whole and is highly aggregated. D.
Section 1.5 Linear Models Some real-life problems can be modeled using linear equations. Now that we know how to find the slope of a line, the equation of a line, and the point of intersection of two lines,
Management Accounting 243 Pricing Decision Analysis The setting of a price for a product is one of the most important decisions and certainly one of the more complex. A change in price not only directly
CHAPTER19 Managerial Accounting Acct202 19-1 PreviewofCHAPTER19 19-2 Managerial Accounting Basics Managerial accounting, a field of accounting that provides economic and financial information for managers
How to Forecast Your Revenue and Sales A Step by Step Guide to Revenue and Sales Forecasting in a Small Business By BizMove Management Training Institute Other free books by BizMove that may interest you:
Breakeven Analysis Variable Vary directly in proportion to activity: Example: if sales increase by 5%, then the Variable will increase by 5% Remain the same, regardless of the activity level Mixed Combines
Chulalongkorn University: BBA International Program, Faculty of Commerce and Accountancy 2900 (Section ) Chairat Aemkulwat Economics I: Microeconomics Spring 205 Solution to Selected Questions: CHAPTER
Chapter 10 OUTPUT AND COSTS Decision Time Frames Topic: Short Run 1) The short run is a period of time in which A) the quantities of some resources the firm uses are fixed. B) the amount of output is fixed.
Solutions to Homework Problems for Basic Cost Behavior by David Albrecht Solution to Problem #11 This problem focuses on being able to work with both total cost and average per unit cost. As a brief review,
business builder 3 how to prepare a profit and loss (income) statement amegy bank business resource center how to prepare a profit and loss (income) statement 2 how to prepare a profit and loss (income)
ESERCIZI 1 USING REGRESSION TO CALCULATE FIXED COST, CALCULATE THE VARIABLE RATE, CONSTRUCT A COST FORMULA AND DETERMINE BUDGETED COST Refer to the Pizza Vesuvio company information in Cornerstone Exercise
BUSINESS BUILDER 3 HOW TO PREPARE A PROFIT AND LOSS (INCOME) STATEMENT zions business resource center 2 how to prepare a profit and loss (income) statement A Profit and Loss (P&L) or income statement measures
1. CVP analysis and purposes: Profit per unit of a product depends on its selling price and cost of sales. Total profit depends on sales volume which in turn depends inter alia on selling price. By and
Fundamentals Pilot Paper Knowledge module Management ccounting Time allowed: 2 hours LL FIFTY questions are compulsory and MUST be attempted. Paper F2 o NOT open this paper until instructed by the supervisor.
INDUSTRIAL UNIVERSITY OF HO CHI MINH CITY AUDITING ACCOUNTING FACULTY 10.SHORT-TERM DECISIONS & CAPITAL INVESTMENT APPRAISAL 4 Topic List INDUSTRIAL UNIVERSITY OF HO CHI MINH CITY AUDITING ACCOUNTING FACULTY
Chapter 3: Cost-Volume-Profit Analysis and Planning Agenda Direct Materials, Direct Labor, and Overhead Traditional vs. Contribution Margin Income Statements Cost-Volume-Profit (CVP) Analysis Profit Planning
Relevant Costs for Decision Making Identifying Relevant Costs A relevant cost is a cost that differs between alternatives. An avoidable cost can be eliminated, in whole or in part, by choosing one alternative
Managerial and Cost Accounting (Exam) Your AccountingCoach PRO membership includes lifetime access to all of our materials. Take a quick tour by visiting www.accountingcoach.com/quicktour. Table of Contents
CHAPTER 3 COST-VOLUME-PROFIT ANALYSIS NOTATION USED IN CHAPTER 3 SOLUTIONS SP: Selling price VCU: Variable cost per unit CMU: Contribution margin per unit FC: Fixed costs TOI: Target operating income 3-1
Part Five Cost Volume Profit Analysis COST VOLUME PROFIT ANALYSIS Study of the effects of changes of costs and volume on a company s profits A critical factor in management decisions Important in profit
Chapter 6 Cost-Volume-Profit Relationships 6-2 LEARNING OBJECTIVES After studying this chapter, you should be able to: 1. Explain how changes in activity affect contribution margin. 2. Compute the contribution
Assessing the Cost of Poor Quality Convincing OEMs to invest in preventive actions may be as simple as showing them the numbers. The key is to understand the costs associated with a poor quality system.
ntroductiorito MANAGERIAL ACCOUNTING N Professor Miami University Professor Emeritus, Brigham Young University Professor Emeritus, University of Washington McGraw-Hill Irwin CONTENTS PROLOGUE Managerial
139 Part 2 Costs and Decision Making Chapter 5 Chapter 6 Chapter 7 Chapter 8 Cost Behavior and Relevant Costs Cost-Volume-Profit Analysis and Variable Costing Short-Term Tactical Decision Making Long-Term
BREAKEVEN ANALYSIS INTRODUCTION Break-even even analysis is a technique widely used by production management and management accountants. Ir. Haery Sihombing/IP Pensyarah Pelawat Fakulti Kejuruteraan Pembuatan
COST CLASSIFICATION AND COST BEHAVIOR INTRODUCTION LESSON# 1 Cost Accounting Cost Accounting is an expanded phase of financial accounting which provides management promptly with the cost of producing and/or
TM 5-1 COST-VOLUME-PROFIT RELATIONSHIPS Cost-volume-profit (CVP) analysis is concerned with the effects on net operating income of: Selling prices. Sales volume. Unit variable costs. Total fixed costs.
Management Accounting 31 Financial Statements for Manufacturing Businesses Importance of Financial Statements Accounting plays a critical role in decision-making. Accounting provides the financial framework
Managerial Accounting 2010 Edition John J. Wild University of Wisconsin at Madison Ken W. Shaw University of Missouri at Columbia McGraw-Hill Irwin Boston Burr Ridge, IL Dubuque, IA New York San Francisco
Journal of Construction Education Spring 1999, Vol. 4, No. 1, pp. 26-37 Copyright 1999 by the Associated Schools of Construction 1522-8150/99/$3.00/Educational Practice Manuscript Practical Business Application
Chapter 6-1 Chapter 6 Cost-Volume-Profit Relationships McGraw-Hill /Irwin The McGraw-Hill Companies, Inc., 2007 Basics of Cost-Volume-Profit Analysis Contribution Margin (CM) is the amount remaining from
Vol. 1, Chapter 9 Basic Cost Concepts Problem 1: Solution 1. Taxable Income Tax Rate $0 - $20,000 10% $20,000 - $50,000 $2,000 + 20% of the amount over $20,000 > $50,000 $8,000 + 30% of the amount over
Business School (Paisley & Hamilton Campus) Session 013-014 Trimester 1 MANAGEMENT ACCOUNTING MODULE CODE: ACCT08004 Date: 1 st January 014 Time: 1000-100 Answer THREE questions Question 1 in Section A,
Cost-Volume-Profit Analysis Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income. In performing this analysis, there
DOWNLOAD FREE TEXT BOOKS AT BOOKBOON.COM Introduction Nikolaos Tsorakidis, Huron University, London Sophocles Papadopoulos, Huron University, London Michael Zerres, Universität Hamburg Christopher Zerres,
for F2 ACCA Examinations REVIEW OF SOME KEY FUNDALMENTALS 1 Know difference in type of accountant Management Accountant Planning Controlling Decision Making Internal Reporting Financial Accountant Accounts
COST AND MANAGEMENT ACCOUNTING 1. Re-ordering level is equal to (a) Maximum consumption x minimum re-order period (b) Maximum consumption x maximum re-order period (c) Minimum consumption x minimum re-order
Review of Fundamental Mathematics As explained in the Preface and in Chapter 1 of your textbook, managerial economics applies microeconomic theory to business decision making. The decision-making tools
Purpose Management Accounting Fundamentals [MA1] Examination Blueprint 2014 2015 The Management Accounting Fundamentals [MA1] examination has been constructed using an examination blueprint. The blueprint,