Experience curve

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The document discusses the concept of an experience curve, which shows that the real production cost of a product declines by 20-30% for every doubling of cumulative production quantity. It notes that experience curves and learning curves are sometimes used interchangeably but have different meanings, with experience curves reflecting all costs at a macro level and learning curves specifically relating to labor hours and costs. The document also outlines some strategic, internal, and external uses of experience curves, such as determining pricing, scheduling, and estimating costs.

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The Concept  A stable strategy arises out of a basic perception by the management that the firm should concentrate on using its present resources for developing its competitive strength in particular market areas. In simple words, stability strategy refers to the company’s policy of continuing the same business and with the same objectives A firm pursues stability strategy when 1. It continues to serve the public in the same product or service, market, and function sectors as defined in its business definition. 2. Its main strategic decisions focus on incremental improvement of functional performance. 2. Corporate Restructuring is the process of redesigning one or more aspects of a company. 3. The process of reorganizing a company may be implemented due to a number of different factors, such as positioning the company to be more competitive, surviving a currently adverse economic climate, or acting on the self confidence of the corporation to move in an entirely new direction.

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The capital which is needed for the regular operation of business is called working capital. 1- for the purchase of raw materials 2- for the payment of wages 3- payment of rent and of other expenses Working capital is kept in the form of cash, debtors, raw materials inventory, stock of finished goods, bills receivable etc. Size Of Business Nature Of Business Storage Period Credit Period Seasonal Requirement Potential Growth Or Expansion Of Business Changes In Price Level Dividend Policy Working Capital Cycle Operating Efficiency Other Factors Working capital requirement of a firm is directly influenced by the size of its business operation. Big business organizations require more working capital than the small business organization. Working capital requirement depends also upon the nature of business carried by the firm. Normally, manufacturing industries and trading organizations need more working capital than in the service business organizations. A service sector does not require any amount of stock of goods. But in the manufacturing or trading firm, credit sales and advance related transactions are in large amount. Time needed for keeping the stock in store is called storage period. The amount of working capital is influenced by the storage period. If storage period is high A firm should keep more quantity of goods in store and hence requires more working capital. if the storage Period is less , then more stock of goods must be held in store as work-in-progress.

Classmate ALearning OutcomesIn Chapters 5 and 6, we have

VinaOconner450

Classmate A Learning Outcomes In Chapters 5 and 6, we have learned about the cost behavior patterns and process costing in an organization. It considered that the cost behavior patterns and process costing in accounting decisions. Cost behavior patterns define how the organization and operating expenditures change or remain the same through dissimilar events. Practices can be changed, particularly while changing the production levels or sales volume within a business. It may rise in fixed, variable, and mixed expenditures. For example, let's assume that the cost of direct material of a bike company for each bike is $40. If the motorcycle unrestricted made one bike, the total variable price for natural materials is around $40. If the bike company made two bikes, the total variable cost becomes double that is $80. It shows that the variable cost mainly changes in percentage to change in the volume of activity. If the production becomes double, then total variable cost also double, and the cost per unit remains similar. The term variable costs must define the full price with the variations in activities, not the price per unit. In chapter 8, we also learned about how united airlines fight to regulate costs. United Airlines is considered the second primary air carrier in the world. The industry study that the airlines had high fixed prices, making it hard for the business to cut prices rapidly in line with its deduction in income. It also shows that there is difficulty in finding the fixed costs. The fixed expenses are a significant element of total operating expenditures, making it hard for airlines to create short-term cuts in spending when income reduces. It seems that the variable, fixed, and mixed expenses are essential for quick decision-making and are used for a particular period. The appropriate variety is the range of actions for which cost behavior patterns are like to be correct. In chapter 9 it has been discussed the process costing in production costs. Process costing is an introductory section in production costs because process costing defines the price of each product made as similar to the price of every other product. It seems that a desk company produces desks, and it maintains a benefit over it that their participants made desks in large quantities, that is 4000 to 8000 desks per month, with the help of globally accepted designs. It permits the business to purchase material in bulk, which results in a discount on costs from suppliers. The same desk is made for all the consumers; as a result, desk products can limit the production procedure to two processing sections: assembly and finished. New participants recently started producing the same desk, and the desk company worried whether the desk production price is reasonable. The above example shows that it is hard to make the production process successful without proper technique costing. The managers can use cost behavior patterns while making decisions because it helps ...

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Reply to DiscussionsD1 bhuvanaAccounting plays a vital role.docx

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Reply to Discussions D1: bhuvana Accounting plays a vital role in an organization, which leads to gain favorable profits. Change in activity of production also affects the differences in cost behavior. This behavior is implied as a change in the whole business. Cost may stay the same or replacement depending on the market. In managerial accounting and cost accounting, t three types of cost behavior are most common (("Cost Behavior Patterns", 2020). Variable costing, fix costing, and mix requiring are types. In variable cost, the cost is directly proportional to the activity, and as the activity increases, the value also increases. And the opposite is too exact (Graybeal, Franklin & Cooper, 2020). Fixed costs, as the name indicates, are the costs that do not change when the activity is increased or decreased. The price is not affected by the production or any event. Mixed costs are a combination of fixed and variable expenses partially (Lakmal, 2014). The management team must understand how cost behavior is crucial for planning and controlling the cost of organization activity with an analysis of the damage to volume profit. To design a budget for a business, studying the effects of cost change in the activity level showcases how much profit can be generated (Popesko & Novák, 2014). Process costing In process costing, the cost is assigned to the process of manufacturing each unit of production. In this, the price of each unit is assumed to be the same. This type of costing is commonly used where the production of goods takes place at a mass level. The costs are not distinguished easily when it is linked to individual units ("Types of Costs by Behavior", 2020). Weighted average cost, first in first out, and standard charge are the different types of costing process. In process costing, costs are built over a fixed duration and then are assigned to units of production at a specific time frame ("What Are Cost Behavior Patterns?", 2020). A company that is owned by Mark and Perk produces the machines in a batch. The setup cost per batch is $2300. $3 is the variable cost A let units for 1-13000. Another variable cost per unit that is more than 13000 is $7. The fixed cost initially js $12000. For every 10,000 units, the cost of the additional fire is $3000. Determine the total cost for the company with the 13,600 units produced in 10 batches. Total cost= $2300*10+$3*13,600+$12000 =$75800 References Cost Behavior Patterns. (2020). Retrieved 7 June 2020, from https://saylordotorg.github.io/text_managerial-accounting/s09-01-cost-behavior-patterns.html Graybeal, P., Franklin, M., & Cooper, D. (2020). Identify and Apply Basic Cost Behavior Patterns. Retrieved 7 June 2020, from https://opentextbc.ca/principlesofaccountingv2openstax/chapter/identify-and-apply-basic-cost-behavior-patterns/ Lakmal, D. (2014). Cost Analysis for Decision Making and Control: Marginal Costing versus Absorption Costing. SSRN Electronic Journal. doi: 10.2139/ssrn.

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Cost Analysis ModelsUnit 3 Written AssignmentBUS .docx

bobbywlane695641

Cost Analysis Models Unit 3: Written Assignment BUS 5110 Managerial Accounting Unit 3 Introduction Cost management is important for all businesses and is used to plan and control the budget. This is done by analysing business practices, predicting expenditures in advance and reducing the chance of over spending in relation to income. Using the client provided data for a business involved in the catering and events industry we can evaluate how productive and effective her business is. Provide an accurate solution. We can see from the data in the attached costing sheet that the company has a break even point of 3158 events. To come to this conclusion, we calculated the revenue per event (Current revenue / number of events) $22,500,000 / 5000 = $4,500. We also require our Contribution margin (Revenue per event - Variable cost per event) $4,500 - $2,600 = $1,900. To calculate the Breakeven point, we simply take the Fixed cost and divide that by the Contribution margin = 6,000,000 / 1,900 = 3157.89 Hypothetically, if the company decided they’d like to improve their revenue and increase their profits from $3,500,000 to $5,000,000 we can use the data to calculate the number of events required to reach that target. Using the Units to Achieve a Target Income formula (Total fixed costs + Target income) / Contribution margin per unit = (6,000,000 + 5,000,000) / 1,900 = 5789.47 = 5789 events (Walther, L. M. & Skousen, C.J., 2009). Provide a narrative that defines and discusses the purpose of assigning cost categories of fixed and variable costs. Operating a business incurs a range of costs. These can be defined as either fixed costs which don’t change in relation to activity and variable costs which do. These costing structures will likely differ between businesses and industries. Companies have even been known to use different costing structures between different internal departments. (CFI., n.d.) Many fixed costs are going to be unavoidable and come from the simple operational side of your business. Costs such as depreciation, taxes and rent will likely remain unchanged however other fixed costs such as advertising budgets are more discretionary. Variable costs are also able to be altered depending on the size and scale of your business. For example, order quantities can be increased to bring unit costs down however before committing to such decisions forecasting your sales based on this should also be carried out to ensure you don’t end up grossly overstocked (Walther, L. M. & Skousen, C.J., 2009). In order to maximise profits companies are required to minimise or eradicate unnecessary costs any way they can, ideally with no impact on the quality of the final product. A manager must understand both of these categories and the importance they play in the overall running of the business if they’re ever going to effectively improve the business model, reduce costs and remain profitable. Provide a narrative that defines and discusses.

As a manager, discuss how you would use or have used the concepts .docx

wraythallchan

As a manager, discuss how you would use or have used the concepts 1) Cost-Volume-Profit Analysis 2) Importance of Profit- cost- volume analysis 3) Variable Costing in Planning 4) Importance of Variable costing Instrcutions: 1) Original post for two different topics total 600 words 2) 3 Responses to classmates = 450 words total 3) 3 articles/peer reviewed references for one question and 3 Articles/Peer Reviewed references for other question. 4) Citation required in the body. 5) APA format Response#1(Mahesh) Cost-Volume-Profit Analysis is observed as the employment of a model that helps in breaking down the complexity that exists between cost of production and operation, quality of goods produced, and the profits generated from the whole undertaking (Lulaj & Iseni, 2018). CVP takes into consideration the influence each aspect of operation or production unit has on the running of an organization. It stipulates the expenses that are to be incurred in a given operation by considering the fixed and variable costs that come with production of a good or a service or yet the sale of a product. This makes it an essential tool in the control of budgetary allocation in an organization as it provides the necessary information that gives direction on the combined activities that are likely to add value to an investor's capital (Serfling, 2016). A major example may be stipulated in the production of a food product, which seems to gain demand on weekends. In such a case, the business producing the product will commit its resources elsewhere during the weekday to optimize on the scarce resources and avoid drowning in expenses example fixed costs such as rent and utilize its production unit to meet the accruing demand on weekends. Thus, it is without a doubt to state that CVP Analysis is a major tool of planning used in managing risks, optimizing on the scarce resources which are all essential in enhancing customer satisfaction (Lulaj & Iseni, 2018). Essentially, CVP provides information that is crucial in the control and planning of production, among other operational activities in an organization. Variable Costing Variable costing revolves around the assigning of the period and product costs in regards to a given kind of product. Researchers observe that it is an essential approach in internal reporting due to its ability to break the complexity that comes along with an organization’s operation and production (Creese, 2017). It addresses costs product costs related to manufacturing and specifically those that can be directly attributed to a product. In this case, it provides enough information that is crucial in controlling the production sector and makes plans through strategies such as budgetary allocation (Serfling, 2016). This is so in that it provides the relationship between the expected and actual costs and through this it becomes easier for the management to schedule their operations, which’s crucial in maximizing the .

BBA 2301, Principles of Accounting II 1 Course Lea

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BBA 2301, Principles of Accounting II 1 Course Learning Outcomes for Unit VIII Upon completion of this unit, students should be able to: 7. Explain how financial information influences both short-term and long-term management decisions. 7.1 Describe the use of standard cost manufacturers and service businesses. 8. Discuss operational and capital budgets. 8.1 Describe capital budgeting methods. 8.2 Identify the use of intangible benefits in capital budgeting. Course/Unit Learning Outcomes Learning Activity 7.1 Unit Lesson Chapter 26, pp. 26-1 to 26-24 Webpage: Balanced Scorecard Basics Video: What is a balanced scorecard: A simple explanation for anyone Unit VIII Case Study 8.1 Unit Lesson Chapter 27, pp. 27-1 to 27-19 Unit VIII Case Study 8.2 Unit Lesson Chapter 27, pp. 27-1 to 27-19 Unit VIII Case Study Required Unit Resources Chapter 26: Standard Costs and Balanced Scorecard, pp. 26-1 to 26-24 Chapter 27: Planning for Capital Investments, pp. 27-1 to 27-19 In order to access the following resources, click the links below. Balanced Scorecard Institute. (n.d.). Balanced scorecard basics. https://balancedscorecard.org/bsc-basics- overview/ For the video resource below, a transcript and closed captioning are available upon accessing the video. Marr, B. (2019, June 24). What is a balanced scorecard: A simple explanation for anyone [Video]. Cielo24. https://c24.page/2s4pmxpj2kpwnprckg6p8tcjtu Unit Lesson Introduction This final unit will conclude the study of managerial accounting. This lesson will share important content for managers in manufacturing, merchandising, and service companies. Content includes estimating future costs, implementing financial and non-financial performance measures, and incorporating capital budgeting. Costing requires you to make estimates. As noted in a previous unit, many people are uncomfortable with this task, as they are used to having objective numbers given to them. However, as much as the future is UNIT VIII STUDY GUIDE Management: Costs and Capital Investing https://balancedscorecard.org/bsc-basics-overview/ https://c24.page/2s4pmxpj2kpwnprckg6p8tcjtu BBA 2301, Principles of Accounting II 2 UNIT x STUDY GUIDE Title unpredictable, we are still required to use our experience and judgment to chart a path forward. In this unit, you will learn about standard costs. Partially based on prior period actual costs, they provide the basis for budgeting and subsequent evaluation. Management accountants, no matter the title, are integral to the development of standard costs, implementation of the balanced scorecard, and the capital budgeting process. Pay attention as you read, review, and evaluate this unit as it is almost wholly transferable to any company. Consider the following questions and how you would respond to each as you move through this unit.  As the chief accounting officer (CAO) or chief ...

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Job costing 1. Introduction 1.1 Meaning 1.2 Applicability 1.3 advantages 1.4 Limitations 1.5 Principles 1.6 Reports in Job Costing 1.7 Process costing v/s Job Costing 1.8 Companies Using Job Costing 2. Costing Procedure 2.1 Process of Job Costing 2.2 Job Cost Sheet/ Card 2.3 Format of Job Costing 2.4 Collection of Costs for a job 3. Accounting for Job Costing 4. Consequences of Incorrect Job Costing 5. Conclusion 6. Bibliography

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