Demo optimization of internal Supply Chain for Multinational Enterprise. Transfer Prices and Flows of Goods are optimizing simultaneously. Yield from simultaneous optimization = 2.7% of additional profit in comparison with sequential optimization.
Solution Manual Cost Accounting Planning and Control by Matz.Hammer and Usry ...Bushra Sultana Malik
This Solution manual Cost Accounting Planning and Control.
Chapter 3 is not Complete.But The Complete chapter is Uploaded See my other Uploads,Chapter 3 Problems are Available.
Solution Chapter 3 l Cost Accounting Planning and Control by Matz.Hammer an...Bushra Sultana Malik
This document contains 9 journal entries related to the manufacturing cost accounting cycle for 3 jobs. It records materials, labor, and overhead being charged to Work in Process accounts for each job. It also records payroll expenses and taxes, and the application of overhead to production using a predetermined overhead rate of 80%.
The document provides an income statement and schedule of cost of goods manufactured for Chan Corporation for the year ended December 31, 2004. It shows revenues of $350 million and cost of goods sold of $232 million, resulting in a gross margin of $118 million. Cost of goods manufactured was $204 million. The schedule breaks down the costs into direct material costs of $105 million, direct manufacturing labor costs of $40 million, and indirect manufacturing costs of $51 million, for total manufacturing costs of $196 million.
The document discusses cost accounting and financial management topics. It includes questions about calculating economic order quantity, labor turnover rates, margin of safety, break even analysis, material variances, costing manuals, objectives of cost accounting, material purchase levels, treatment of waste and scrap, piece rate systems, overhead rates, allocation vs apportionment, integrated accounting for a chemical processing company.
This document summarizes exercises from Chapter 12 of Cost Accounting, 9th Edition. It includes 11 exercises covering topics like work-in-process, overhead application rates, fixed and variable overhead rates, normal and actual capacity, budgeted and actual overhead, and overhead variances including spending and idle capacity variances. Calculations are shown for overhead application, budgeting, and analyzing variances at different production capacity levels.
This document contains examples and problems related to manufacturing costs and cost of goods sold calculations. It includes journal entries, income statements, and calculations for direct material costs, direct labor costs, factory overhead costs, work in process, finished goods, and cost of goods sold. Manufacturing costs are calculated and allocated to inventory and cost of goods sold using absorption costing. Variances between applied and actual overhead are also accounted for.
This document summarizes a manufacturing process using normal loss and average costing systems. It lists group members and outlines the manufacturing process. It then provides a quantity schedule and calculates costs charged to the department, including material, labor, overhead and costs from preceding departments. It also calculates normal losses between departments and determines average unit costs.
Solution Manual Cost Accounting Planning and Control by Matz.Hammer and Usry ...Bushra Sultana Malik
This Solution manual Cost Accounting Planning and Control.
Chapter 3 is not Complete.But The Complete chapter is Uploaded See my other Uploads,Chapter 3 Problems are Available.
Solution Chapter 3 l Cost Accounting Planning and Control by Matz.Hammer an...Bushra Sultana Malik
This document contains 9 journal entries related to the manufacturing cost accounting cycle for 3 jobs. It records materials, labor, and overhead being charged to Work in Process accounts for each job. It also records payroll expenses and taxes, and the application of overhead to production using a predetermined overhead rate of 80%.
The document provides an income statement and schedule of cost of goods manufactured for Chan Corporation for the year ended December 31, 2004. It shows revenues of $350 million and cost of goods sold of $232 million, resulting in a gross margin of $118 million. Cost of goods manufactured was $204 million. The schedule breaks down the costs into direct material costs of $105 million, direct manufacturing labor costs of $40 million, and indirect manufacturing costs of $51 million, for total manufacturing costs of $196 million.
The document discusses cost accounting and financial management topics. It includes questions about calculating economic order quantity, labor turnover rates, margin of safety, break even analysis, material variances, costing manuals, objectives of cost accounting, material purchase levels, treatment of waste and scrap, piece rate systems, overhead rates, allocation vs apportionment, integrated accounting for a chemical processing company.
This document summarizes exercises from Chapter 12 of Cost Accounting, 9th Edition. It includes 11 exercises covering topics like work-in-process, overhead application rates, fixed and variable overhead rates, normal and actual capacity, budgeted and actual overhead, and overhead variances including spending and idle capacity variances. Calculations are shown for overhead application, budgeting, and analyzing variances at different production capacity levels.
This document contains examples and problems related to manufacturing costs and cost of goods sold calculations. It includes journal entries, income statements, and calculations for direct material costs, direct labor costs, factory overhead costs, work in process, finished goods, and cost of goods sold. Manufacturing costs are calculated and allocated to inventory and cost of goods sold using absorption costing. Variances between applied and actual overhead are also accounted for.
This document summarizes a manufacturing process using normal loss and average costing systems. It lists group members and outlines the manufacturing process. It then provides a quantity schedule and calculates costs charged to the department, including material, labor, overhead and costs from preceding departments. It also calculates normal losses between departments and determines average unit costs.
The document outlines the calculation of cost of goods sold (COGS) by detailing opening and closing inventory amounts for materials and finished goods, purchases and returns, direct materials consumed, cost of goods manufactured, prime costs including direct materials and labor, conversion costs including labor and factory overhead, total manufacturing costs, and the final calculation of COGS by adding opening finished goods inventory and subtracting closing finished goods inventory from the cost of goods manufactured.
1. The document provides accounting information for cost of goods sold, cost of goods manufactured, and inventory balances for a manufacturing company. It includes details on direct materials, direct labor, overhead costs, and beginning and ending inventory balances.
2. Cost of goods sold was calculated as $123,000 based on beginning and ending finished goods inventory and cost of goods manufactured.
3. Cost of goods manufactured was calculated as $97,000 based on direct materials, direct labor, overhead costs, and beginning and ending work in process inventory.
The document provides information and examples related to cost accounting, including:
1) Exercises calculating cost of goods manufactured, cost of goods sold, prime cost, conversion cost, and total variable cost.
2) Journal entries for the manufacturing cost accounting cycle.
3) Cost of goods manufactured and cost of goods sold statements for multiple companies.
This document discusses absorption costing and variable costing. Absorption costing includes both variable and fixed production costs in inventory and cost of goods sold, while variable costing includes only variable costs. Variable costing is more consistent with contribution margin analysis and decision making. Absorption costing is required for external financial reporting and tax purposes, but variable costing provides more useful information to management for decision making.
1. The document contains 11 examples of cost of production reports from various departments. Each example provides information on quantities, costs added, and how costs are accounted for units completed, work in process, and any abnormal losses or spoilage.
2. Key details in the reports include quantity schedules showing units received, completed, in process, and lost; costs charged by the department broken down by material, labor, overhead; and equivalent production calculations.
3. The examples demonstrate how to prepare cost of production reports and account for costs in different scenarios involving normal and abnormal losses, spoilage, and addition of materials.
The Changing Role of Managerial Accounting in a GLOBAL Business EnvironmentAbdullah Rabaya
Absorption costing and variable costing treat fixed manufacturing overhead costs differently. Absorption costing includes a portion of fixed overhead in the product cost, while variable costing excludes fixed overhead. This leads to differences in reported income when production levels differ from sales volumes between periods. However, over multiple periods, total income is the same under both absorption and variable costing.
- The company reported fluctuating profits over 3 months despite consistent sales prices.
- Production and sales volumes varied each month. Fixed costs were budgeted at Rs. 400,000 per month but absorbed differently each month due to varying production levels.
- Under absorption costing, profits fluctuate due to under/over application of fixed costs to inventory and cost of goods sold each period. With variable costing, fixed costs are expensed and contribution margin is calculated, leading to more stable reporting of performance.
Chapter 6 Connect Quiz (Variable Costing and Segment Reporting:Tools for Mana...Emily Bauer
1. Aaker Corporation reported a total contribution margin of $198,000 for the most recent month. The contribution margin was calculated as (Selling Price - Variable Costs) x Units Sold.
2. Meyer Corporation reported total fixed expenses of $78,000. This was calculated by adding the traceable fixed expenses of $45,000 and the common fixed expenses of $33,000.
3. For a manufacturing company, the absorption costing unit product cost for the month was $96 per unit. This was calculated by taking the variable costs per unit plus the fixed manufacturing overhead costs allocated on a per unit basis.
Variable costing & absorption costingnaimhossain8
The document discusses variable costing and absorption costing. It provides examples of how to calculate costs and prepare income statements under each method. Variable costing includes only variable costs as product costs, while absorption costing includes both variable and fixed manufacturing costs. Absorption costing may result in higher reported income when production exceeds sales due to deferred fixed costs in inventory. Variable costing is generally used internally while absorption costing is used for external reporting in accordance with GAAP. The document also outlines some key advantages and limitations of each costing method.
This document contains a case study with multiple parts involving various costing and decision making scenarios for several companies. Part A involves analyzing fixed and variable costs and contribution margin for a manufacturing company. Part B involves break-even analysis using contribution format income statements. Part C involves a special order decision using relevant costs. Part D involves a make-or-buy decision using relevant costs. Part E involves deciding whether to further process or sell intermediate products using relevant costs. Part F involves deciding whether to drop a product using avoidable and relevant costs.
This document provides a cost sheet analysis for a ladies clothing manufacturer. It includes details of direct costs like materials consumed and wages. It also lists factory overheads like handwork and coloring. Office overheads such as electricity are included. Sales and distribution overheads such as salesman salaries and commissions are specified. Calculations for prime cost, factory cost, cost of production and total cost are demonstrated. The cost sheet shows total sales of Rs. 911,000 with a net profit of Rs. 61,000, which is 6.70% of sales. In summary, the document presents a cost analysis for a clothing company through a detailed cost sheet.
1. MongoDB's default indexing method causes performance issues as it locks the entire replica set during indexing.
2. Background indexing in newer versions may help but still risks slowing down all secondaries simultaneously.
3. The presenter suggests a manual indexing method where each secondary can index independently without affecting the others. This would distribute the indexing load and prevent replica set-wide slowdowns.
This document describes Optimal Management, an LLC that optimizes supply chains for multinational companies. It develops sophisticated mathematical models and numerical optimization methods to optimize global supply chain flows and transfer prices, integrating the solutions with SAP systems. The company is seeking $1.2 million in seed funding to patent its innovations and build prototypes. It has a experienced team and plans to generate revenue through licensing deals and consulting services.
Relatório de monitoramento do plano nacional de cidadaniaCristiane Novaes
O relatório descreve as ações do Plano Nacional de Promoção da Cidadania e Direitos Humanos de Lésbicas, Gays, Bissexuais, Travestis e Transexuais implementadas no primeiro semestre de 2010, incluindo 166 ações em 16 ministérios. O relatório detalha as ações do Ministério da Educação para promover a igualdade de gênero e o respeito à diversidade sexual nas escolas por meio de projetos, publicações e cursos de formação de professores.
New tools have been developed to more easily identify copyrighted works that have been posted or shared online. The document discusses blogs, posts, sharing works, the University of Texas Libraries' Copyright Crash Course, and several websites related to copyright including Smashing Magazine, DocsToC, and Careerfaqs. It also lists music works like "U Can't Touch This" that are subject to copyright.
The document outlines the calculation of cost of goods sold (COGS) by detailing opening and closing inventory amounts for materials and finished goods, purchases and returns, direct materials consumed, cost of goods manufactured, prime costs including direct materials and labor, conversion costs including labor and factory overhead, total manufacturing costs, and the final calculation of COGS by adding opening finished goods inventory and subtracting closing finished goods inventory from the cost of goods manufactured.
1. The document provides accounting information for cost of goods sold, cost of goods manufactured, and inventory balances for a manufacturing company. It includes details on direct materials, direct labor, overhead costs, and beginning and ending inventory balances.
2. Cost of goods sold was calculated as $123,000 based on beginning and ending finished goods inventory and cost of goods manufactured.
3. Cost of goods manufactured was calculated as $97,000 based on direct materials, direct labor, overhead costs, and beginning and ending work in process inventory.
The document provides information and examples related to cost accounting, including:
1) Exercises calculating cost of goods manufactured, cost of goods sold, prime cost, conversion cost, and total variable cost.
2) Journal entries for the manufacturing cost accounting cycle.
3) Cost of goods manufactured and cost of goods sold statements for multiple companies.
This document discusses absorption costing and variable costing. Absorption costing includes both variable and fixed production costs in inventory and cost of goods sold, while variable costing includes only variable costs. Variable costing is more consistent with contribution margin analysis and decision making. Absorption costing is required for external financial reporting and tax purposes, but variable costing provides more useful information to management for decision making.
1. The document contains 11 examples of cost of production reports from various departments. Each example provides information on quantities, costs added, and how costs are accounted for units completed, work in process, and any abnormal losses or spoilage.
2. Key details in the reports include quantity schedules showing units received, completed, in process, and lost; costs charged by the department broken down by material, labor, overhead; and equivalent production calculations.
3. The examples demonstrate how to prepare cost of production reports and account for costs in different scenarios involving normal and abnormal losses, spoilage, and addition of materials.
The Changing Role of Managerial Accounting in a GLOBAL Business EnvironmentAbdullah Rabaya
Absorption costing and variable costing treat fixed manufacturing overhead costs differently. Absorption costing includes a portion of fixed overhead in the product cost, while variable costing excludes fixed overhead. This leads to differences in reported income when production levels differ from sales volumes between periods. However, over multiple periods, total income is the same under both absorption and variable costing.
- The company reported fluctuating profits over 3 months despite consistent sales prices.
- Production and sales volumes varied each month. Fixed costs were budgeted at Rs. 400,000 per month but absorbed differently each month due to varying production levels.
- Under absorption costing, profits fluctuate due to under/over application of fixed costs to inventory and cost of goods sold each period. With variable costing, fixed costs are expensed and contribution margin is calculated, leading to more stable reporting of performance.
Chapter 6 Connect Quiz (Variable Costing and Segment Reporting:Tools for Mana...Emily Bauer
1. Aaker Corporation reported a total contribution margin of $198,000 for the most recent month. The contribution margin was calculated as (Selling Price - Variable Costs) x Units Sold.
2. Meyer Corporation reported total fixed expenses of $78,000. This was calculated by adding the traceable fixed expenses of $45,000 and the common fixed expenses of $33,000.
3. For a manufacturing company, the absorption costing unit product cost for the month was $96 per unit. This was calculated by taking the variable costs per unit plus the fixed manufacturing overhead costs allocated on a per unit basis.
Variable costing & absorption costingnaimhossain8
The document discusses variable costing and absorption costing. It provides examples of how to calculate costs and prepare income statements under each method. Variable costing includes only variable costs as product costs, while absorption costing includes both variable and fixed manufacturing costs. Absorption costing may result in higher reported income when production exceeds sales due to deferred fixed costs in inventory. Variable costing is generally used internally while absorption costing is used for external reporting in accordance with GAAP. The document also outlines some key advantages and limitations of each costing method.
This document contains a case study with multiple parts involving various costing and decision making scenarios for several companies. Part A involves analyzing fixed and variable costs and contribution margin for a manufacturing company. Part B involves break-even analysis using contribution format income statements. Part C involves a special order decision using relevant costs. Part D involves a make-or-buy decision using relevant costs. Part E involves deciding whether to further process or sell intermediate products using relevant costs. Part F involves deciding whether to drop a product using avoidable and relevant costs.
This document provides a cost sheet analysis for a ladies clothing manufacturer. It includes details of direct costs like materials consumed and wages. It also lists factory overheads like handwork and coloring. Office overheads such as electricity are included. Sales and distribution overheads such as salesman salaries and commissions are specified. Calculations for prime cost, factory cost, cost of production and total cost are demonstrated. The cost sheet shows total sales of Rs. 911,000 with a net profit of Rs. 61,000, which is 6.70% of sales. In summary, the document presents a cost analysis for a clothing company through a detailed cost sheet.
1. MongoDB's default indexing method causes performance issues as it locks the entire replica set during indexing.
2. Background indexing in newer versions may help but still risks slowing down all secondaries simultaneously.
3. The presenter suggests a manual indexing method where each secondary can index independently without affecting the others. This would distribute the indexing load and prevent replica set-wide slowdowns.
This document describes Optimal Management, an LLC that optimizes supply chains for multinational companies. It develops sophisticated mathematical models and numerical optimization methods to optimize global supply chain flows and transfer prices, integrating the solutions with SAP systems. The company is seeking $1.2 million in seed funding to patent its innovations and build prototypes. It has a experienced team and plans to generate revenue through licensing deals and consulting services.
Relatório de monitoramento do plano nacional de cidadaniaCristiane Novaes
O relatório descreve as ações do Plano Nacional de Promoção da Cidadania e Direitos Humanos de Lésbicas, Gays, Bissexuais, Travestis e Transexuais implementadas no primeiro semestre de 2010, incluindo 166 ações em 16 ministérios. O relatório detalha as ações do Ministério da Educação para promover a igualdade de gênero e o respeito à diversidade sexual nas escolas por meio de projetos, publicações e cursos de formação de professores.
New tools have been developed to more easily identify copyrighted works that have been posted or shared online. The document discusses blogs, posts, sharing works, the University of Texas Libraries' Copyright Crash Course, and several websites related to copyright including Smashing Magazine, DocsToC, and Careerfaqs. It also lists music works like "U Can't Touch This" that are subject to copyright.
El documento describe los pasos para crear una aplicación "hola mundo" usando Git y GitHub, incluyendo inicializar un repositorio local, agregar archivos, realizar un commit inicial, y empujar el código a un repositorio remoto. Luego menciona algunas estadísticas sobre GitHub, como el número de usuarios y repositorios, antes de detallar los comandos para crear, configurar y desplegar una aplicación en Heroku usando Git.
Hoover Dam was built between 1931-1936 on the border of Nevada and Arizona. It was constructed as a concrete anti-gravity dam across the Black Canyon of the Colorado River. The dam cost over $100 million and hundreds of lives to build. Six Companies, Inc was awarded the contract to build the dam. They established a new city called Boulder City to house the thousands of workers during construction. Hoover Dam provides hydroelectric power and irrigation water to parts of the western United States.
Broan nutone canada green initiatives 2006 2010OssoElectric
Broan takes green seriously. Besides manufacturing products that help consumers save energy, Broan Canada takes steps to reduce their own green consumption.
The document describes the past continuous tense in Spanish. It explains that the past continuous is used to describe an action that was in progress in the past. It provides examples of forming the past continuous in the affirmative (subject + was/were + verb + -ing), negative (subject + wasn't/weren't + verb + -ing), and questions (was/were + subject + verb + -ing) forms. Examples are given for common verbs like watch, listen, play, eat, and chat.
This assignment brief outlines tasks for a Level 3 Extended Diploma in Creative Media Production focusing on sound design for computer games. Students must analyze sound design in computer games, create original sound samples and compositions for different game genres, and provide a blog analyzing their work. The tasks are mapped to grading criteria for Units 73 (Sound for Computer Games) and 2 (Communication Skills for Creative Media Production). Students will produce sound assets using audio software and field recordings, apply them to a game following industry standards, and communicate their work through structured reports and a media production pitch with technology.
This document discusses the different types of costs that firms face in production. It defines total, fixed, variable, average, and marginal costs. Total cost is the market value of all inputs used and includes both explicit costs that require money outlays and implicit opportunity costs. Fixed costs do not vary with output while variable costs do. The relationships between these costs are shown using tables of data and graphs of cost curves, including the typical U-shaped average total cost curve. Costs differ in the short-run versus long-run due to variable fixed costs.
Process costing explained with examples free of cost .It is for students of managerial accounting ,read this to quickly go through process costing.
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Skypatrol's LotMan inventory management system provides more than just vehicle tracking on a dealership lot. It increases dealership revenue by helping customers find vehicles more quickly, eliminating issues like dead batteries losing sales, and demonstrating features to boost F&I sales. It reduces costs by allowing instant inventory counts without extra staff, preventing theft and unauthorized use, and ensuring fuel is only used for test drives. The system monitors important vehicle data through an OBD-II connection, uses GPS and cellular antennas to constantly track location, and alerts dealers to issues like low batteries or vehicles leaving the lot.
Here are the steps to prepare the Process 1 account using FIFO method considering the losses:
1. Calculate equivalent units (EUP)
- Opening WIP: 1000 units (60% complete) = 600 EUP
- Production: 20000 units
- Closing WIP: 3000 units (20% complete) = 600 EUP
- Total EUP = 21000 units
2. Calculate costs:
- Opening WIP costs: Materials $6000, Conversion $1200 = $7200
- Current period costs: Materials $30000, Conversion $52200 = $82200
- Total costs = $82200 + $7200 = $89400
3. Calculate cost per EUP:
The document discusses various costing methods and contribution margin analysis techniques used for managerial decision making. It provides examples of calculating income statements and contribution margins under absorption costing and variable costing. It also illustrates how contribution margin analysis can be used to evaluate performance by market segment, product line, salesperson, and route for various companies including a fragrance producer and airline.
This document provides examples of classifying costs as direct or indirect, variable or fixed for different cost objects across manufacturing, service, and merchandising sectors. It also discusses computing unit costs using total versus variable costs, relevant ranges for fixed and variable costs, and identifying cost drivers in a value chain. Key information includes examples of how costs are classified based on their behavior and relationship to the cost object, as well as how relevant ranges and fixed versus variable costs impact the calculation of total unit costs.
This document discusses process costing, which is a method of cost accounting used in manufacturing industries. It involves breaking production down into sequential processes and computing an average cost per unit by dividing total production costs for a period by the units produced. Key aspects covered include accounting treatment of material, labor, and overhead costs for each process, treatment of normal and abnormal losses and gains, and methods for valuing work-in-progress inventory using either FIFO or weighted average costing. An example is provided to illustrate the calculation of process costs using both methods. Advantages of process costing include ease of preparing quotes while limitations include inability to evaluate performance or reliability for costing multiple product types.
Income statement Functional Format,Linear cost Function,Method of Analyzing cost,Comparison of variable costing , unit cost computation, Illustration of variable costing , evaluation of results. Managerial Accounting
This document contains solutions to multiple choice and problem-style questions for an ACCT 505 final exam. The questions cover topics such as flexible budget analysis, make-or-buy analysis, absorption vs variable costing income statements, schedule of cost of goods manufactured and cost of goods sold, process costing using the weighted average method, net present value calculations, break-even analysis, predetermined overhead rates, and cash budgeting.
1. Silver City performed a flexible budget analysis to evaluate its cost control. Actual costs were compared to the static budget.
2. Globe Co. conducted a make-or-buy analysis to determine if it should continue producing electronic hinges internally or purchase them from an outside supplier. The analysis showed purchasing from Supplier C would be the most cost effective option.
3. Mesa Company prepared income statements using both absorption costing and variable costing. Variable costing more accurately reflects periodic income by excluding fixed overhead from the cost of goods sold calculation.
The document discusses key concepts in marginal costing such as marginal cost, marginal costing, direct costing, absorption costing, contribution, profit volume analysis, limiting/key factors, break even analysis, and profit volume charts. It provides definitions and explanations of these terms. It also compares absorption costing and marginal costing, highlighting differences in how they treat fixed and variable costs, inventory valuation, and measurement of profitability. Examples are given to illustrate calculation of contribution, profit-volume ratio, break even point using algebraic method, and profit at different sales volumes. The document is an overview of important concepts in marginal costing used for management decision making.
The document discusses key concepts related to national income:
- Domestic income generated within a country is called domestic product or domestic income. Income generated abroad by residents is called factor income from abroad (FIFA). Income generated within the domestic territory by non-residents is called factor income to abroad (FITA).
- National income or national product is the combined income from the domestic territory and FIFA, minus FITA.
- There are three main methods to calculate national income: income method, expenditure method, and value added method.
- The income method measures national income based on payments received by factors of production. The expenditure method measures aggregate demand or total spending in the economy. The value added method
This chapter discusses the costs of production for a firm. It explains the differences between fixed and variable costs, as well as how average and marginal costs are determined. In the short run, costs are influenced by increasing or decreasing returns. In the long run, the user cost of capital must be considered. Cost curves, including total, average, and marginal costs are presented to show how costs change with different levels of output.
- Costs can be classified as either variable or fixed based on how they react to changes in business activity
- Variable costs change in proportion to changes in activity, while fixed costs remain unchanged with activity levels
- Understanding cost behavior and classifications is important for cost-volume-profit (CVP) analysis, which analyzes the relationship between costs, sales volume, and profits
This document discusses various concepts of cost, including:
1. Real cost, opportunity cost, money costs, accounting vs. economic costs, and fixed vs. variable costs.
2. Production costs including total cost, total fixed cost, total variable cost, average fixed cost, average variable cost, average total cost, and marginal cost.
3. Cost curves and the relationships between marginal cost and average cost curves.
4. Methods of estimating cost functions including linear, quadratic, and step cost functions.
The document provides information for participants in a business simulation game set in the beverage industry. It includes starting financial positions and production details, as well as costs associated with raw materials, packaging, marketing, financing, and taxes. Participants must manage the business over multiple quarters, making decisions about production levels, pricing, financing, and expansions to achieve the highest cumulative profits.
This revision webinar focuses on the short run costs of businesses. It includes with examples a distinction between fixed and variable costs, average, marginal and total costs and short and long run costs.
ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
Similar to Simultaneous optimization of Transfer Prices and Flows of Goods in comparison with sequential optimization (20)
Optimization of internal Supply Chain (Transfer Prices and Good Flows) for Mu...Andrey Sukhobokov
Anna Petrova
phone: +7 495 123 4567
e-mail: anna.petrova@optimalmngmnt.com
Address:
Optimal Management, LLC
Skolkovo Innovation Center, Building 3
Moscow, 143026, Russia
Thank you for your attention!
Simultaneous optimization of Transfer Prices and Good Flows against two-step ...Andrey Sukhobokov
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Simultaneous optimization of Transfer Prices and Flows of Goods in comparison with sequential optimization
1. Optimal Management, LLC
Demo calculation for optimization of simplified
supply chain in multinational enterprise
The comparison of
Two-step optimization
• first optimization of production and logistic (minimizing costs),
• then optimization of taxation (maximizing profit by varying
transfer prices)
One-step simultaneous optimization of transfer prices,
production and logistic parameters
and
2. 2
Presentation’s
agenda
• Demo Supply Chain’s structure…….………...3
• Demo Supply Chain’s data….………………….5
• Variants of calculations...…………………..…14
• Comparison of calculation’s results….….....18
• The specificity of problem…….…….……..…20
• Rendering the service…………….…….…..…21
4. 4
• Subsidiary 1 in Country A produces Raw Material and sells it
to Subsidiary 2 in Country A and Subsidiary 4 in Country C.
• Subsidiary 2 in Country A produces Finished Product and
sells it to Subsidiary 3 in Country B and Subsidiary 5 in
Country C.
• Subsidiary 4 in Country C produces Finished Product and
sells it to Subsidiary 3 in Country B and Subsidiary 5 in
Country C.
• Subsidiary 3 in Country B sells Finished Product to Market
zone 1, Market zone 2 and Market zone 3.
• Subsidiary 5 in Country C sells Finished Product to Market
zone 1, Market zone 2 and Market zone 3.
Supply chain’s
structure
5. 5
• Export duty charged in Country A for Raw Material based
on the value of the transferred Raw Material = 15%
• Export duty charged in Country A for Finished Product
based on the value of the transferred Finished Product =
5%
• Import duty charged in Country C for Finished Product
based on the value of the transferred Finished Product =
20%
• Corporate tax rate in country A = 34%
• Corporate tax rate in country B = 50%
• Corporate tax rate in country C = 20%
Supply chain’s data
Taxes & Duties
6. 6
• Maximum volume (or demand) of the Finished Product
for sale in Market zone 1 = 20,000 units/unit of time for
price $38/unit
• Maximum volume (or demand) of the Finished Product
for sale in Market zone 2 = 20,000 units/unit of time for
price $36/unit
• Maximum volume (or demand) of the Finished Product
for sale in Market zone 3 = 30,000 units/unit of time for
price $33/unit
Supply chain’s data
Market volumes & prices
7. 7
• Lower and upper bounds of the transfer prices on Raw
Material between countries A and C = $5 - $6/unit
• Lower and upper bounds of the transfer prices on
Finished Product between countries A and B = $26 - $27
/unit
• Lower and upper bounds of the transfer prices on
Finished Product between countries A and C = $26 - $27
/unit
• Lower and upper bounds of the transfer prices on
Finished Product between countries C and B = $26 - $27
/unit
Supply chain’s data
Intervals of transfer prices
8. 8
• Capacity of Subsidiary 1 = 180,000 units of Raw Material/
unit of time
• Production capacity of Subsidiary 2 = 40,000 units of
Finished Products/unit of time
• Production capacity of Subsidiary 4 = 40,000 units of
Finished Products/unit of time
• Distribution capacity of Subsidiary 3 = 50,000 units of
Finished Products/unit of time
• Distribution capacity of Subsidiary 5 = 50,000 units of
Finished Products/unit of time
Supply chain’s data
Production capacity
9. 9
• Variable costs for producing the Raw Material in
Subsidiary 1 = $2/unit
• Variable costs for producing the Finished Product in
Subsidiary 2 = $7/unit
• Variable costs for producing the Finished Product in
Subsidiary 4 = $5/unit
• Variable costs for distributing the Finished Product in
Subsidiary 3 = $1/unit
• Variable costs for distributing the Finished Product in
Subsidiary 5 = $1/unit
Supply chain’s data
Variable costs
10. 10
• Fixed costs at Subsidiary 1 in Country A = $200,000 /
unit of time
• Fixed costs at Subsidiary 2 in Country A = $120,000 /
unit of time
• Fixed costs at Subsidiary 3 in Country B = $40,000 /
unit of time
• Fixed costs at Subsidiary 4 in Country C = $100,000 /
unit of time
• Fixed costs at Subsidiary 5 in Country C = $20,000 /
unit of time
Supply chain’s data
Fixed costs (other expenses)
11. 11
• Transportation cost for unit of Raw material on Route
Subsidiary1 Subsidiary2 = $2 / unit
• Transportation cost for unit of Raw material on Route
Subsidiary1 Subsidiary4 = $4 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 2 Subsidiary 3 = $2 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 2 Subsidiary 5 = $5 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 4 Subsidiary 3 = $5 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 4 Subsidiary 5 = $2 / unit
Supply chain’s data
Transportation costs (1/2)
12. 12
• Transportation cost for unit of Finished Product on
Route Subsidiary 3 Market zone 1 = $8 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 3 Market zone 2 = $3 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 3 Market zone 3 = $5 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 5 Market zone 1 = $10 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 5 Market zone 2 = $2 / unit
• Transportation cost for unit of Finished Product on
Route Subsidiary 5 Market zone 3 = $2 / unit
Supply chain’s data
Transportation costs (2/2)
13. 13
• Resource consumption units of Subsidiary 2 = 2.5 units
of Raw Material/unit of Finished Product
• Resource consumption units of Subsidiary 4 = 2.0 units
of Raw Material/unit of Finished Product
Supply chain’s data
Resource consumption
18. 18
Calculation results
(Generalized)
Net Income After Tax (NIAT):
Without optimization (empirical approach) $204,040
After optimization of logistic costs (Step1) $242,360
After optimization of profit by varying of
transfer prices (Step2 after Step1)
$257,330
After simultaneous optimization of logistics
and transfer prices
$264,330
19. 19
Optimization results
Yield from simultaneous optimization = 2.7%
of additional profit
0 50 000 100 000 150 000 200 000 250 000 300 000
Without optimization
After optimization of logistic costs
(Step1)
After optimization of profit (Step2
after Step1)
After simultaneous optimization
Net Income After Tax (NIAT)
20. 20
• The more advanced the supply chain (more
goods positions and more nodes in the
chain), the greater the effect of
simultaneous optimization of flow of goods
and transfer prices.
• For an advanced supply chain (more goods
positions and more nodes in the chain),
you can’t do optimization calculation using
Excel.
The specificity of
Problem
21. 21
Solution as a
service
While product is being developed, we offer solution as a
service.
The entire service process consists of the following steps:
• Research of basic structure of customer’s supply chain
• Estimation of costs on calculation and full data gathering
• Approval for parameters to be taken into account
• Fitting of the math model to the client’s needs
• Gathering all necessary data for the developed model
• Transformation of gathered data into computational model
• Performing the calculation
• Applying the results
By analogy to the tasks of logistics optimization, static model
calculates parameters for 18 months ahead every 6 months.
Dynamic model calculates weekly or monthly.
22. 22
Contacts
Contact persons:
• In USA & Great Britain – Vitaliy Baklikov
phone: +1 240 620 1229
e-mail: vitaliy.baklikov@optimalmngmnt.com
• In Russia & CIS – Andrey Sukhobokov
phone: +7 903 577 9667
e-mail: andrey.sukhobokov@optimalmngmnt.com