Alpha Manufacturing sells shipping containers and is operating near capacity. It has been approached by a new customer wanting to order 1,000 units at $65 per unit, which would require giving up sales of 600 current units at $75 per unit. Accepting the new order would increase Alpha's profits by $6,000. If the special order price was $50 per unit instead, Alpha's profits would decrease by $9,000.
A marketing Case Study of Natureview Farm, an organic yogurt manufacturer. This analysis was performed by E. Santhosh Kumar, IIT Madras, during an internship with Prof. Sameer Mathur, IIM Lucknow.
A marketing Case Study of Natureview Farm, an organic yogurt manufacturer. This analysis was performed by E. Santhosh Kumar, IIT Madras, during an internship with Prof. Sameer Mathur, IIM Lucknow.
Planning a Product launch ? Here is a guideline/template for Defining a Go To Market Strategy. The deck would be more apt for Technology Product / Solution launch. Feel free to download and customize the deck for your needs.
The 2013 Deloitte Undergraduate Case Competition challenged students to develop strategy, technology, and human capital recommendations for MAD HATS, a company that donates a hat to a person in need for each hat purchased by one of their customers.
Marketing strategy
Marketplace live
Marketplace live performance review
Marketplace live assessment of strategy & its execution
Marketplace live lesson learnt
Detailed analysis of implication of merger between Cooper Industries and Nicholson File Company
The DCF valuation excel can viewed at:
https://drive.google.com/file/d/0B6nSS-YiZgneVEpVWVA2QWpyX28/view?usp=sharing
Reliance Baking Soda is Stewart Corporation's oldest and most established product. The new Domestic Brand Director needs to create a 2008 marketing budget that delivers a profit increase of 10% over 2007 levels. She must first evaluate the effectiveness of past consumer and trade promotions and determine if a price increase will have net bottom line benefits. Then she must decide on the optimal allocation of her marketing budget, taking into account the brand's apparent "cash cow" role in the Household Division of Stewart Corporation. Students are expected to complete a quantitative assignment: create and defend a budget.
EGT267 Programming for Engineering Applications Spring 2020 .docxgidmanmary
EGT267 Programming for Engineering Applications Spring 2020
1
EGT 267 HW-1 (Due on February 20 in the class)
PROGRAMMIING ENGINEERING PROBLEMS
Problem 1: (Conversions) This problem involves converting a value in one unit to a value in
another unit. The program should prompt the user for a value in the specified units and then print
the converted value, along with the new units.
(1) Write a program to convert pounds to kilograms. (Recall that 1 kg = 2.205 lb). The pound
value you input/test is 159 lb.
Problem 2: (Areas and Volumes) This problem involves computing an area or a volume using
input from the user. The program should include a prompt to the user to enter the variables needed.
(1) Write a program to compute the area of a triangle with base b and height h. (Recall that
Aerea = ½* (b * h). ) The b and h values are 1.8 and 6.7 meters, respectively.
Problem 3: (Wind Tunnels) A wind tunnel is a test chamber built to generate different wind
speeds, or Mach numbers (which is the wind speed divided by the speed of sound). Accurate scale
models of aircraft can be mounted on force-measuring supports in the test chamber, and then
measurements of the forces on the model can be made at many different wind speeds and angles.
At the end of an extended wind tunnel test, many sets of data have been collected and can be used
to determine the coefficient of lift, drag, and other aerodynamic performance characteristics of the
new aircraft at its various operational speeds and positions. Data collected from a wind tunnel test
are listed in the following table:
EGT267 Programming for Engineering Applications Spring 2020
2
Assume that we would like to use linear interpolation to determine the coefficient of lift for
additional flight-path angles that are between -4 degrees and 21 degrees (Let’s estimate the
coefficient of lift @ 9 flight-path angle degrees). Write a program that allows the user to enter the
data for two points and a flight-path angle between those points. The program should then compute
the corresponding coefficient of lift.
Homework requirements:
please take two screenshots (one screen shot is for your code; the other is for the results), copy &
past them into your homework, and then submit a hard copy.
Sheet1MAC 7200, CASE STUDY WEEK 61) BREAK EVEN POINTA) IN UNITSSales Revenue16.00 Variable Materials3.00 Variable Labor1.00 Variable Overhead3.50 Variable Marketing Costs1.50Total Variable Costs:9.00CONTRIBUTION MARGIN PER UNIT7.0044%Fixed overhead4.00Fixed Marketing costs2.00Total Fixed Costs6.00BREAK EVEN POINT IN UNITS = FIXED COSTS / CONTRIBUTION MARGIN PER UNITEQUATION16N - 9N - 90,000 = 0Fixed Costs:90,000.007N = 90000CONTRIBUTION MARGIN PER UNIT7.00BREAK EVEN POINT IN UNITS12,857N=B) BREAK EVEN IN DOLLARSUNITS BREAKEVEN12,857SALES PRICES$ 16.00BREAK EVEN IN DOLLARS$ 205,712.00Combined2. SPECIAL ORDER ANALYSISremainder of ca ...
Planning a Product launch ? Here is a guideline/template for Defining a Go To Market Strategy. The deck would be more apt for Technology Product / Solution launch. Feel free to download and customize the deck for your needs.
The 2013 Deloitte Undergraduate Case Competition challenged students to develop strategy, technology, and human capital recommendations for MAD HATS, a company that donates a hat to a person in need for each hat purchased by one of their customers.
Marketing strategy
Marketplace live
Marketplace live performance review
Marketplace live assessment of strategy & its execution
Marketplace live lesson learnt
Detailed analysis of implication of merger between Cooper Industries and Nicholson File Company
The DCF valuation excel can viewed at:
https://drive.google.com/file/d/0B6nSS-YiZgneVEpVWVA2QWpyX28/view?usp=sharing
Reliance Baking Soda is Stewart Corporation's oldest and most established product. The new Domestic Brand Director needs to create a 2008 marketing budget that delivers a profit increase of 10% over 2007 levels. She must first evaluate the effectiveness of past consumer and trade promotions and determine if a price increase will have net bottom line benefits. Then she must decide on the optimal allocation of her marketing budget, taking into account the brand's apparent "cash cow" role in the Household Division of Stewart Corporation. Students are expected to complete a quantitative assignment: create and defend a budget.
EGT267 Programming for Engineering Applications Spring 2020 .docxgidmanmary
EGT267 Programming for Engineering Applications Spring 2020
1
EGT 267 HW-1 (Due on February 20 in the class)
PROGRAMMIING ENGINEERING PROBLEMS
Problem 1: (Conversions) This problem involves converting a value in one unit to a value in
another unit. The program should prompt the user for a value in the specified units and then print
the converted value, along with the new units.
(1) Write a program to convert pounds to kilograms. (Recall that 1 kg = 2.205 lb). The pound
value you input/test is 159 lb.
Problem 2: (Areas and Volumes) This problem involves computing an area or a volume using
input from the user. The program should include a prompt to the user to enter the variables needed.
(1) Write a program to compute the area of a triangle with base b and height h. (Recall that
Aerea = ½* (b * h). ) The b and h values are 1.8 and 6.7 meters, respectively.
Problem 3: (Wind Tunnels) A wind tunnel is a test chamber built to generate different wind
speeds, or Mach numbers (which is the wind speed divided by the speed of sound). Accurate scale
models of aircraft can be mounted on force-measuring supports in the test chamber, and then
measurements of the forces on the model can be made at many different wind speeds and angles.
At the end of an extended wind tunnel test, many sets of data have been collected and can be used
to determine the coefficient of lift, drag, and other aerodynamic performance characteristics of the
new aircraft at its various operational speeds and positions. Data collected from a wind tunnel test
are listed in the following table:
EGT267 Programming for Engineering Applications Spring 2020
2
Assume that we would like to use linear interpolation to determine the coefficient of lift for
additional flight-path angles that are between -4 degrees and 21 degrees (Let’s estimate the
coefficient of lift @ 9 flight-path angle degrees). Write a program that allows the user to enter the
data for two points and a flight-path angle between those points. The program should then compute
the corresponding coefficient of lift.
Homework requirements:
please take two screenshots (one screen shot is for your code; the other is for the results), copy &
past them into your homework, and then submit a hard copy.
Sheet1MAC 7200, CASE STUDY WEEK 61) BREAK EVEN POINTA) IN UNITSSales Revenue16.00 Variable Materials3.00 Variable Labor1.00 Variable Overhead3.50 Variable Marketing Costs1.50Total Variable Costs:9.00CONTRIBUTION MARGIN PER UNIT7.0044%Fixed overhead4.00Fixed Marketing costs2.00Total Fixed Costs6.00BREAK EVEN POINT IN UNITS = FIXED COSTS / CONTRIBUTION MARGIN PER UNITEQUATION16N - 9N - 90,000 = 0Fixed Costs:90,000.007N = 90000CONTRIBUTION MARGIN PER UNIT7.00BREAK EVEN POINT IN UNITS12,857N=B) BREAK EVEN IN DOLLARSUNITS BREAKEVEN12,857SALES PRICES$ 16.00BREAK EVEN IN DOLLARS$ 205,712.00Combined2. SPECIAL ORDER ANALYSISremainder of ca ...
CMA MAY 2022 EXAMINATION
INTERMEDIATE LEVEL II
Subject: CM231. MANAGEMENT ACCOUNTING
Model Solution CM231.-MAC-IL-II-Solution-CMA-May-2022-Examination.pdf
1. Reid Recreation Products sells the Amazing Foam Frisbee for $12.docxpaynetawnya
1. Reid Recreation Products sells the Amazing Foam Frisbee for $12. The variable cost per unit is $2; fixed costs are $36,100 per month.
a. Breakeven Point?
b. Breakeven sales?
2. How many frisbees must Reid sell to earn $21,100 in operating income?
3. What operating income must Reid earn to realize net income of $19,080, assuming that the company is in the 40% tax bracket?
4. How many frisbees must Reid sell to earn $19,080 in net income, assuming that the company is in the 40% tax bracket?
5. (below)
Maverick Wings, Inc. manufactures airplanes for use in stunt shows. Maverick’s factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each plane has different features (such as its shape, weight, and color), Maverick uses a job order costing system to accumulate product costs.
At the end of 2013, Maverick’s accountants developed the following expectations for 2014 based on the marketing department’s sales forecast:
Budgeted overhead cost
$1,053,000
Estimated machine hours
48,000
Estimated direct labor hours
8,000
Estimated direct materials cost
$1,520,000
Maverick’s inventory count, completed on December 31, 2013, revealed the following ending inventory balances:
Raw Materials Inventory
$249,000
Work in Process Inventory
$626,000
Finished Goods Inventory
$1,530,000
The company’s 2014 payroll data revealed the following actual payroll costs for the year:
Job Title
Number Employed
Wage Rate per Hour
Annual Salary per Employee
Total Hours Worked perEmployee
President and CEO
1
$225,000
Vice president and CFO
1
$177,000
Factory manager
1
$40,600
Assistant factory manager
1
$30,600
Machine operator
5
$14.50
2,250
Security guard, factory
2
$20,600
Materials handler
2
$7.50
2,000
Corporate secretary
1
$37,000
Janitor, factory
2
$6
2,150
The following information was taken from Maverick’s Schedule of Plant Assets. All assets are depreciated using the straight-line method.
Plant Asset
Purchase Price
Salvage Value
Useful Life
Factory building
$4,000,000
$150,000
20 Years
Administrative office
$650,000
$125,000
30 Years
Factory equipment
$2,000,000
$20,000
12 Years
Other miscellaneous costs for 2014 all paid in cash included:
Cost
Amount
Factory insurance
$14,000
Administrative office utilities
$5,100
Factory utilities
$30,600
Office supplies
$4,400
Additional information about Maverick’s operations in 2014 includes the following:
•
Raw materials purchases for the year amounted to $1,948,000. All purchases were on account.
•
The company used $1,870,000 in raw materials during the year. Of that amount, 85% was direct materials and 15% was indirect materials.
•
Maverick applied overhead to Work in Process Inventory based on direct materials cost.
•
Airplanes costing $3,450,000 to manufacture were completed and transferred out of Work in Process Inventor ...
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
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
We will dig deeper into:
1. How to capture video testimonials that convert from your audience 🎥
2. How to leverage your testimonials to boost your sales 💲
3. How you can capture more CRM data to understand your audience better through video testimonials. 📊
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
1. BREAK-EVEN
Alpha Manufacturing sells specialized shipping containers. The following data represents normal sales for the company:
Selling Price (P) $75
Full Cost (TC) 50 Don’t use because it’s allocated over an unknown # of units at current “near” full capacity
Variable Costs (v) 35 Use CM based on p-v since v is a known qty
1. Alpha is operating near capacity and has been approached by a new customer who wants to order 1,000 units at $65 per unit. Alpha will have to give up sales of 600 units to its current customers (@$75 /unit) to accept this order. How
will Alpha’s profits change if the order is accepted? ANSWER: N Increase by +$6,000 (CM2*Q2) - (CM1*Q1) = (p2 – v)Q2 - (p1 – v)Q1 = ΔN
2. Now suppose only $50 per unit were offered for the special order. How would Alpha’s profits be affected by accepting this order? ANSWER: Decrease by $9,000
(CM3*Q3) - (CM1*Q1) = (p2 – v)Q2 - (p1 – v)Q1 = ΔN
BREAK-EVEN
Unit Selling Price $24.00 Selling Price – Var. Cost = Contrib. Margin (p – v) = CM (*Q = Total CM)
Variable Costs per unit 12.00 Total Fixed Cost / Contribution Margin $ = # of Units for B/E pt
Allocated Fixed Costs per unit 10.00 Total Fixed Cost / Contribution Margin % = $ of sales to create B/E point
Total Fixed Cost $84,000.00 (Contribution Margin / Unit Selling Price)
10. How many units must be sold to break-even? ANSWER: B/E units = FC/CM = FC / (p-v) = $84,000 / ($24-$12) = 7,000 Units
11. For next year, if sales are projected to be 10,000 units and variable costs are expected to increase by 5%, what price must the company charge to earn a $10,000 pretax profit? ANSWER: $22 per unit
P x Q = FC + (VC x Q) + N P * 10,000 units= $84,000 + 10,000units * (12 * 1.05%) + $10,000) P (Price) = $22 /unit
THEORY OF CONSTRAINTS
X Y Z Throughput / Labor Time in Minutes per Unit =
Demand in units 160 150 140 Total Contribution per Labor Minute
Selling price per unit $130 $160 $150
Raw materials costs per unit $ 65 $ 80 $ 90 Throughput defined as (Selling Price P - Raw Materials Cost)
Labor time in minutes per unit 16 23 10 CM / min = Throughput / min = (P – v) / labor min = ($130/unit - $65/unit) / 16 min/unit = $4.06 /unit
16. The total contribution per labor minute for Product X is calculated to be: ANSWER: $4.06 /unit
ACTIVITY-BASED COSTING
Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-
costing system:
O.H Cost Pool Budgeted O.H. Cost Driver (C.D) Est. C.D. Level Budget O.H. / Cost Driver Level = Cost per Driver
Machine Setup $120,000 # of setups 120 setups
Material Handling $104,400 # of barrels 8,700 barrels
Quality Control $264,000 # of inspections 1,100 inspections
Other O/H Cost $144,000 # of machine hrs 12,000 machine hours
Total Overhead $632,400
A current product order has the following requirements: Cost per Driver * Cost Driver
Machine Setup 8 setups
Material Handling 606 barrels
Quality Control 80 inspections
Machine Hrs 830 machine hrs
Direct Labor Hrs 336 hrs - (***Direct Product cost, not overhead***)
22. What is the total manuf overhead for the new product order if the firm uses a plant-wide rate based on direct labor-hrs? ANSWER: (Total Overhead / Total Direct Labor Hrs)*(Hrs / Job) = ($632,400 / 4,800) * 336 hrs = $44,268
23. Utilizing ABC, how much machine setup overhead is assigned to the order? ANSWER: $ 8,000 ((product budgeted O.H. / Est. C/D Level) * # setups) = (($120,000 / 120 setups) * 8 setups) = $8,000
24. Using ABC, how much quality control overhead is assigned to the order: ANSWER: $19,200 ((product budgeted O.H. / Est. C/D Level) * # inspections) = (($264,000 / 1,100 setups) * 80 inspections) = $19,200
25. Using ABC, how much total overhead is assigned to the order? ANSWER: $44,432 (The sum of all the 4 allocated cost driver components (summation of above method) $8,000 + $19,000 +… = $44,432
BUDGETING (CASH RECEIPTS)
LeMinton Company expects the following credit sales for the first five months of the year: January, $25,000; February, $40,000; March, $30,000; April, $36,000, May $40,000. Experience has shown that payment for the credit sales is
received as follows: 60% in the month of sale, 25% in the first month after sale, 12% in the second month after sale, and the remainder is uncollectible. How much cash can LeMinton Company expect to collect in March as a result of credit
sales? ANSWER: $31,000 January(12%) + February(25%) + March(65%) = Expected to collect in March
BUDGETING (CASH RECEIPTS (collections) / DISBURSEMNETS (payments))
November December January
Cash sales $ 96,000 $125,000 $ 78,000
Credit sales $288,000 $450,000 $234,000 (***or start by multiplying all Credit Sales by the 96% to be collected and work with those numbers – then method below needs to be adjusted (remove the 96% mult.***)
Total sales $384,000 $575,000 $312,000
Management estimated that four percent of credit sales would be uncollectible. Of the collectible credit sales, sixty-five percent would be collected in the month of sale and the remainder in the month following the sale. The firm desires to
begin each month with seventy-five percent of the month's projected total sales units on hand. All purchases of inventory were to be on account; thirty percent would be paid in the month of purchase, and the remainder would be paid in the
month following the purchase. The purchase costs are approximately sixty percent of the selling prices.
A.) Total budget cash collections in December are: B.) Total budget cash collections in January are:
December: January:
Cash Sales $125,000 (Dec Cash Sales) Cash Sales $ 78,000
Collections on A/R Collections on A/R
($288,000 * 96%)*35%= $ 96,768 (Nov Crdt Sales * (1-4%))*35% ($450,000 * 96%)*35%= $151,200
($450,000 * 96%)*65%= $280,800 (Dec Crdt Sales * (1-4%))*65% ($234,000 * 96%)*65%= $146,016
$502,568 (Add Dec Cash Sales + All Crdt Sales) $375,216
C.) Total budgeted purchases in November are: D.) Total budget purchases in December are:
($575,000 * 75%)= $431,250 (Dec Ttl Sales * 75%) ($312,000 * 75%)= $234,000
($384,000 * 25%)= $ 96,000 (Nov Ttl Sales * 25%) ($575,000 * 25%)= $143,750
Ttl pur @ Sllg Price $527,250 (Add the Amounts) Ttl pur @ Sllg Price $377,750
Mulitply by 60% (Multi by % of selling price) Mulitply by 60%
$316,350 $226,650
E.) Budgeted December cash payments for December inventory purchases are: F.) Budgeted cash payments in November for November inventory purchases are:
($226,650 * 30%) = $67,995 ($316,500 * 30%) = $94,905
G.) Budgeted cash payments in December for November inventory purchases are: H.) Total budgeted cash payments in December for inventory purchases are:
($316,350 * 70%) = $221,445 Section G - $316,350 (70%) = $221,445
Section E - $226,650 (30%) = $ 67,995
I.) Budgeted January cash payments for December inventory purchases are: $289,440
($226,650 * 70%) = $158,655
BUDGETING (FORECASTING)
Tony's Fashions forecasts sales of $300,000 for the quarter ended December 31. Its gross profit rate is 20% of sales, and its September 30 inventory is $100,000. If the December 31 inventory is targeted at $40,000, budgeted purchases for
the quarter should be: Answer: $180,000 ( (Forecast Sales *1- 20%) - September Inventory + December Inventory )
VOCABULARY
2. Activity: a specific task or action of work done. High value (design, processing, delivering) and low value (set up, moving, reworking) activities.
Activity-Based Budgeting ABB: is a budgeting process based on activities and associated activity costs to support production and sales operations.
Activity Based Costing: a costing approach that assigns resource costs to cost objects based on activities performed for the cost objects.(Steps in developing an ABC system: identify resource costs and activities; assign resource costs o
activities; assign activity costs to cost objects. Used to improve accuracy of cost by tracing costs to products or customers.) – ABC is expensive and time-consuming.
Activity Based Management: uses activity analysis and activity-based costing to help managers improve value of products and services.
Balanced Scorecard (BSC): an accounting system that includes the firm’s critical success factors in four areas: financial performance, customer satisfaction, internal processes, and learning & growth. (Balanced Scorecard measures -
financial performance, customer satisfaction, internal processes, learning and growth) – a strategy-based performance measurement system, more comprehensive than traditional financial systems.
Batch-Level Activity: an activity performed for each batch of products or services. Ex. Machine setups, purchase orders, scheduling production, batch inspections, etc…
Break-Even Point: the point at which revenues equal total costs and profit is zero.
Budget: is a detailed plan for the acquisition and use of financial and other resources over a specified period of time.
Budgetary Slack: is the “cushion” managers intentionally build into budgets to help ensure success in meeting the budget - padding the budget.
Budgeting Process: budget committee formation; selection of budget period (fixed or rolling); budget guidelines (zero base or revision of prior budget-not preferred);
preparation of initial proposal; negotiation of final budget; review and approve; revision after implementation; evaluation
Cost Allocation: the assignment of indirect cost to cost pools and cost objects – a form of cost assignment in which direct tracing is not economically feasible.
Cost Driver: any factor that causes a change in the cost of an activity.
Cost Life Cycle: the sequence of activities within the firm that begins with research and development, followed by design, manufacturing, marketing/distribution, and customer service.
Cost Management Information: used to implement an org’s strategy. Consists of financial cost and revenue measures, as well as non-financial key success factors (i.e. cust retention, productivity, quality).
Cost Pools: the meaningful groups into which costs are often collected (ex’s. claims processing, financial services, design, purchasing, dept,…)
Cost-Volume Profit Analysis: a method for analyzing how various operating decisions and marketing decisions will affect profit.
(a method for analyzing how various operating decisions and marketing decisions will affect net income.)
Contribution Margin: (unit – the difference between unit sales price and unit variable cost. (p – v)) (total – the unit contribution margin multiplied by the number of units sold. = ((p –v)xQ)) – need +CM to earn a profit
Contribution Margin Ratio: the ratio of the unit contribution margin to unit sales price – (selling price-variable cost)/ selling price = ((p – v)/p).
CPA / CMA: Certified Public Accountant / Certified Management Accountant (by the AICPA = American Institute of Certified Public Accountants, IMA = Institute of Management Accountants).
Decision Making Process: 5 steps: 1 = Determine strategic issues; 2 = Identify alternatives; 3 = Obtain info and conduct analyses; 4 = select and implement solution; 5 = continuous evaluation.
Direct Cost: a cost conveniently and economically traced directly to a cost pool or a cost object (i.e. product or activity).
Direct Labor Cost: the labor used to manufacture the product or to provide the service.
Direct Material Cost: includes the cost of the materials in the product and a reasonable allowance for scrap and defective units
Enterprise Sustainability: balancing a company’s short and long-term goals in three dimensions (social, environmental and financial)
Facility-Level Activity: an activity performed to support operations of products and the facility/factoryin general. Ex. Plant security, maintenance, plant management, property taxes, accounting, etc…
Factory Overhead Applied: the amount of overhead assigned to a job using a predetermined factory overhead rate.
Fixed Cost: the portion of the total cost that does not change with a change in the quantity of the cost driver, within relevant range and given time period. Opposite of variable cost.
Flexible Budget: a budget that adjusts revenues and costs to the actual output level achieved.
High-Volume-Added Activity: increases the value of the product or service to the customer.
Indirect Cost: a cost that is not conveniently or economically traceable to a specific cost pool or cost objective.
Indirect Labor Cost: supervision, quality control, inspection, purchasing and receiving, and other labor-related manufacturing support costs.
Indirect Material Cost: refers to the cost of materials used in manufacturing that are not physically part of the finished product.
Life-Cycle Costing: a method to identify and monitor the costs of a product throughout its life cycle.
(Consists of all steps from production design and purchase of raw materials to delivery and service of the finished product. Monitors cost of product through its life cycle.)
Low-Value-Added Activity: consumes time, resources, or space, but adds little to satisfying customers’ needs.
Master Budget: an organization’s operating and financing pal for the upcoming period; it translates short-term objectives into action steps.
Marin of Safety: the amount of sales above the breakeven point.
Mixed Cost: contains both fixed and variable costs.
Operating Leverage: the ratio of the C.M. to profit = CM/N
Overapplied Overhead: the amount of factory overhead applied that exceeds actual factory overhead cost.
(Applied overhead might exceed incurred overhead if the amount incurred is less than estimated.)
Performance-Level Activity: Support production of a specific product line or service. Ex. Design, purchasing, ECNs.
Period Cost: all non-product expenditures for managing the firm and selling the product. Opposite of product cost, not traceable to a product.
Product Cost: the cost necessary to complete the product (direct materials, direct labor, and factory overhead, ex. Dental, radiaology) = cost of goods sold. Opposite of period cost. Vary w/ Qty of product produced.
Product-Level Activity: an activity performed to support the production of a specific product or service.
Resource Cost: cost category used in BSC to group resource costs (ex. Data processing, supplies, postage, etc…)
Sales Budget: shows expected sales in units at their expected selling prices – has three components: forecasted sales volume, forecasted sales mix, and budgeted selling prices
Sales Life Cycle: the sequence of phases in a product’s or service’s life in the market –
from the introduction of the product, to the growth in sales, and finally maturity, decline, and withdrawal from the market.
Sensitivity Analysis: methods that examine how an amount changes if factors involved in predicting that amount change.
Strategy: a plan for using resources to achieve sustainable goals (2 main strategies: Cost Leadership & Product Differentiation)
Strategy Map: cause-and-effect diagram of the relationships among the 4 BSC perspectives. Mangers use it to show how the achievement
of goals in each perspective affect the achievement of goals in other perspectives, and finally the overall success of the firm.
Sunk Cost: costs that has been incurred in the past or are committed for the future and are therefore irrelevant to decision making.
SWOT Analysis: systematic procedure for identifying a firm’s 4 critical success factors: its internal strengths and weaknesses and its external opportunities and threats.
3. Target Costing: determines the desired cost for a product no the basis of a given competitive price, such that the product will earn a desired profit.
Theory of Constraints (TOC): helps firms effectively improve the rate at which raw materials are converted to finished products.
(Improve important critical success factors: cycle time, rate at which raw materials are converted to finished products. The TOC helps identify and eliminate bottlenecks.)
Throughput Margin: a TOC measure of product profitability; It equals the price less the material cost, including all purchased components and materials handling costs.
Underapplied Overhead: the amount by which actual factory overhead exceeds factory overhead applied. (Applied overhead will be less than the incurred amount of overhead.)
Unit Cost: average cost – total manuf. Cost (materials, labor and overhead) divided by # of unit output.
Unit-Level Activity: an activity performed for each unit of the cost object (each actual product or service). Ex. Direct labor or material costs.
Value Activities: activities a firm must perform in designing and producing/providing a product or service.
Value-Chain Analysis: a strategic analysis used to better understand the firm’s competitive advantage, identify where value to customers can be increased or cost reduced,
and better understand the firm’s linkages with suppliers, customers, and other firms in the industry. (Value-Chain identifies specific steps required to provide
a product/service to the customer. Three phase: upstream steps (ex. design), operations activities (perform R&D), and downstream outputs (completed design).)
Value Engineering: used in target costing to reduce product cost by analyzing tradeoffs between different types of product functionality and total product cost (ex. tools = Functional Analysis, Design Analysis, QFD, Concurrent Eng).
Value Stream: a group of related products - consists of all the activities required to create customer value for a family of products or services – identify value added activities and areas of improvement.
What-If Analysis: the calculation of an amount given different levels for a factor that influences that amount.
Zero-Based Budgeting ZBB: is a budgeting process that requires managers to prepare budgets from a zero base – a fresh start.
Target Costing: Value Chain Life Cycle Phase Cost overtime: highest at introduction, lowest at maturity
(Design Stage) Introduction Grow Mature Decline
Set-Up (UP) High Medium Low Low -- Upstream: Design and Planning <1 Reduce Cost; >1.25 Enhance Value; >1 and <1.25 Acceptable Outcome
Production (MAN) High High Medium Medium -- Manufacturing: Gain Traction and Speed
Customer Service (DOWN) Low Medium High Medium -- Downstream: Support
• What should be our focus: Long-Term – all cost must be considered (all stages in life cycle) Short-Term – just those costs under our control (current phase in life cycle)
Cost Life Cycle:
R&D Design Manufacturing Marketing & Distribution Customer Service
(Upstream Activities/Costs) (Downstream Activities/Costs)
Life-Cycle Costing
Design Stage: Reduces time to Market, expected service costs and eases manufactured critical success
Sales Life Cycle:
Growth Maturity
Sales Intro Decline
Time
CVP Basic Training (Theory of Constraints)
1. (Price – Cost) = Profit Breakeven
2. Cost = (Variable Cost + Fixed Cost) Units = Fixed Costs/Contribution Margin
3. Contribution Margin = (Price – Variable Cost) Sales Dollars = Fixed Costs/Contribution Margin Ratio
• What is controllable at one level may not be at another level; i.e.,
equip purchases
• Attributes = accurate and timely
Chapter 2
Firm Strategy
– Cost Effective (tradeoff between cost of error and cost of investigation)
• Decision Perspective
– Price Leadership - Wal-Mart
– Relevant Costs ***important for decision making***
– Product Differentiation - Target • Differ among alternatives
– Opportunity Costs
– Combination - High Tech Products (Cell Phone, MP3’s Computers, etc.) • Alternatives not selected
SWOT Analysis = (Strengths, Weaknesses, Opportunities, Threats) – Sunk Costs
Value Chain • Past expenditures that are no longer relevant
– Components • Description (More in Chapter 9)
– Upstream (Design) – Variable (Changes with increase in activities)
– Operations (Production) – Fixed (Does not change with increases in activities)
– Downstream (Customers) – Mixed (Combination)
– Determine Critical Success Factor (p. 36) • Relationship to Strategy
– Critical – Structural – (Long Term, how do we capitalize on our strengths to add value)
• Reduce Cost or Add Additional Value • Scale
• Construct Balanced Scorecard to Track Progress • Experience
– Not Critical - Outsource • Technology
Balanced Scorecard BSC (Performance Beyond Net Income) • Complexity
– Financial Perspective – Executional (Short Term, how can we reduce costs)
– Customer Perspective • Workforce Involvement
– Internal Processes Perspective • Design of the Production Process
– Learning and Growth Perspective • Supplier Relationships
For Public Corporations, Shareholder Wealth (Financial Perspective is Most Important) • ACCOUNTING PERSPECTIVE
For Private Companies, Owners Set the Top Priority and May Chooses More than Four • Classification (all costs are considered, not just controllable)
Sustainability Perspective – Product (Can be traced to a product or service)
– Emerging Importance • Direct (Materials and Labor, traceable)
– Considers Environmental and Social Performance – Maybe engineered or discretionary
Strategy Map • Indirect (Overhead, allocated)
– Links four perspectives of the Balanced Scorecard – Distinction is subject of Chapter 5
– Key is to have activities feed into another perspective – Period Costs (Costs related to the organization and not traceable to a product)
• Dead ends do not add value • Marketing & nonproduction administrative/general costs
• Sort by level
– Resource Cost
Chapter 3 – Cost Pool
Basic Cost Concepts – Cost Object
• MANAGERIAL PERSPECTIVE • (All linked by cost drivers)
• Controllable vs. Noncontrollable • Sort by object classification
– Only performance relative to controllable costs is evaluated – Product Costs
• Contrast with Financial Accounting • Ending Inventory or Cost of Goods Sold
4. – Period Costs – Selling prices will likely change too
• Costs for running the business (not tied directly to a product)
• How do we reach target cost?
CHAPTER 5 – Upstream (Direction)
ABC & CUSTOMER COSTS • Design & Planning
• Cost vs. Expense • Value Engineering (Quality Function Deployment)
• Expenses are accurate – financial accounting concept 1. Determine Cost Components
• Costs are estimates approaching accuracy – management accounting concept 2. Determine Relative Customer Values
– descriptive of past (accounting) 3. Assign Costs across Values
• creating data points 4. Calculate Importance Index (Step 3/Step1)
– predictive of future (management) – <1, Reduce Cost
– maintaining or moving data points – >1.25, Enhance Value
• DETERMING COST – >1 and <1.25, Acceptable Outcome
(COST OBJECT AUTOPSY) • Interaction must be considered
• Direct + Indirect = Total 1. Too little upstream planning may result in
• Traceable + Allocated = Total additional downstream costs
• What has happened over time 2. Too much upstream planning may not result in
– Shift from Primarily Direct to Primarily Indirect downstream savings
– Manufacturing (Traction & Speed)
– Shift from Primarily Traceable to Primarily Allocated
–Focus has shifted to emphasis on how indirect costs are allocated
• Continuous Improvement/Kaizen - Japanese cost reduction method
• Efficient Processes
• COST ALLOCATION METHODS
1. Adequate Capacity
• VOLUME BASED - Single product, low indirect costs, all costs treated equally. 2. Reduced Cycle Time (Takt Time Concept)
3. Efficient workflow (Drum, Buffer, Rope)
– Downstream (Support)
• ACTIVITY BASED – Unique products, high indirect costs, assigned based on activity usage • Plan according to life cycle
• COST OF INAPPROPRIATE VOLUME COSTING– Some Products overcosted (high •
•
Theory of Constraints
What to do when there is not enough capacity (short run problem)
volume), some undercosted (low volume)
• Theory of Constraints Concept
• VOLUME COSTING CALCULATION
– Identify the constraint and affected products; i.e., too little labor to work on all
• Total indirect costs/Total # of units (output or input (hours)) = Cost assigned to each unit
products
• Example: Restaurant food & beverage bill plus tax and tip.
– Food & beverage are direct costs – Calculate Throughput Margins
– Tax and tip are indirect costs (Selling Price – Direct Materials)/Units of Constrained Resource
• Volume costing solution to tax and tip allocation is to divide by the • Theory of Constraints, Example
number of diners; i.e., everyone pays the same amount A company finds there is not enough labor for (fill in the blank of your choice) to produce both A and B.
• ABC COST CALCULATION • Theory of Constraints, Example
• More complex process • Solution
• Step 1: IDENTIFY RESOURCE COSTS AND ACTIVITIES –
–
Short Term: Produce A, then B
Long Term: Add Capacity or change the process
– Costs come from accounting records; in our example the total bill
• In the textbook, you find the problem
– Activities are how those costs are “used”
• In the workplace, the problem finds you!
• Unit Level
• Cost Volume Profit (CVP)
• Batch Level
• Two alternatives for profit planning
• Product Level
– Replicate the entire income statement and compare results – time consuming and
• Facility Level
confusing because of “volume”
• Step 2: ASSIGN RESOURCE COSTS TO ACTIVITIES BY GROUP (COST POOLS) – Use CVP analysis
• Focus is on cost behavior vs. cost description
• Unit Level - Direct Labor & Materials; in our example, food & • Uses aggregate vs. “line item” data
beverage per diner • Easier to apply and interpret
• Batch Level - Setup & inspection • Cost Volume Profit (CVP)
• Product Level - Design, Administration of parts/products, • CVP Basic Training
Marketing – (Price – Cost) = Profit
• Facility Level - Maintenance, Insurance, Taxes; in our example
taxes and tip • Can be per unit or weighted average if the product mix remains
constant
• Step 3: ASSIGN ACTIVITY COSTS TO COST OBJECTS (based on cost drivers; i.e., how – Total Cost = (Variable Cost + Fixed Cost)
the objects “use” the cost) – Contribution Margin = (Price – Variable Cost)
– In our example, each diner would be assigned the food and beverages they • (Contribution Margin/Time) = Contribution Margin per Time Unit
ordered plus the applicable tax and tip related to the cost of that order. Contrast
with volume based total/# – Price x Quantity = Fixed Cost + (Variable Cost x Quantity) + Profit
– Allocate by either • P x Q = FC + (VC x Q) + N
•
•
Resources used per cost object – allocates all costs
Resources available – allocates only those costs used and identifies
– Total Profit = Operating Profit – FC N = CM * Q - FC
– N used as pretax profit from practice exam
excess/wasted capacity – see Bellhaven Homes p.136 • CVP Applications
– insignificant or nontraceable are volume allocated – Breakeven Analysis
• ACTIVITY BASED MANAGEMENT - ABM (Focus on Activities vs. Costs) – Profit Planning
– Cost Volume Profit (CVP)
• Hi-Value Activities – Contributes to customer satisfaction/value or organizational needs • Examples:
(product design, manufacture, & delivery) – Breakeven Formula
– Find ways to enhance • Units = Fixed Costs/Contribution Margin
• Low-Value Activities – (set up, moving parts, inspection, repair, etc.)
•
Assume Fixed Costs = $10,000 and per unit,
Sales Dollars = Fixed Costs/Contribution Margin Ratio
– Find ways to reduce or eliminate • Cost Volume Profit (CVP)
– The more routine the process, the less the percentage of Low-value activities • Units: $10,000/4 = 2,500
(banks vs. government agencies) • Sales: $10,000/20 = $50,000
• CUSTOMER PROFITABILITY ANALYSIS $50,000 of sales creates $10,000 of profit which is equal to fixed costs
• Takes ABC Concept beyond the “cost of sales” – Profit Planning (Moving beyond breakeven)
• Perspective (single cell, age of reptiles & snakes, man walks upright) • Treat target profit as an additional fixed cost
• Used to assess customer profitability • To get pretax profits, divide by (1- tax rate)
– The “Whale Curve” Phenomena – Sensitivity Analysis
– CUSTOMER PROFITABILITY ANALYSIS • Margin of Safety – number of units above breakeven
• Angels & Demons Matrix • Operating Leverage – (Contribution Margin/Operating Profit)
• Shift in Marketing focus from “Spray & Pray” to “Investing in Customers) – Higher values for firms with high fixed costs
– Cheaper to keep old customers than get new ones and expensive to get back lost » Good when above breakeven
customers. » Bad when below
– Customer life value takes a longer run view – i.e., customer at age 35 vs. age 85 » Airline example, 72.4% was
profitable in the 90’s, but 70.4% post
CHAPTERS 9 & 13 9-11 was disastrous
Target Costing, Theory of Constraints, & CVP – Lower values for firms with low fixed costs
• Target Costing » Profit is less dramatically affected by
• Focus is on how to use costs vs. classify costs (Ch. 3 & 5) swings in volume/revenue
– Will the costs we plan to incur allow us to earn a profit? If not, what can we do? • Critical Success Factors at the Design Stage:
– Target Price = Target Cost + Desired Profit – Reduced time to market
• The Survival Triplet (linked to strategy) – Reduced expected service costs
Cost Price – Reduced product environmental impact
– Improved ease of manufacture
Functionality Quality – Process Planning and Design
(trade-offs) (meets specs) • Sales Life Cycle
Fancy features sticking with fundamentals – Phase 1: Introduction or R&D Design high cost / low profit
• Costs must be considered in the context of Life Cycle and Value Chain • Little competition, slow sales, costs relatively high, prices are high
• Target Costing due to product differentiation
• What should be our focus?
– Long Term: All costs must be considered, including fixed (All stages in L.C.)
– Phase 2: Growth or Introduction high costs / high returns
• Sales increase rapidly;
– Short Term: Just those costs under our control, variable (current phase in L.C.) – Phase 3: Maturity small costs / high profits
• How do costs change over time?
– Highest at introduction, lowest at maturity – Phase 4: Decline low costs / med/low profits
• May change with volume too – step functions, relevant range, CHAPTER 10
learning curves Master Budget
5. • Relationship to Strategy
• Budget is how management implements strategy
– Formal expression of plans/communication
• Hopefully motivational????
• Expressed in operational terms (dollars/units)
– Forward looking
– Basis for Assessment
• Should not be dominate purpose
– Matches External and Internal Factors
• External (Opportunities & Threats)
• Internal (Strengths & Weaknesses – competitive advantage)
– Budgeting Process
An “ideal Process”
1. Budget Committee Formation
2. Selection of Budget Period
– Fixed or Rolling (usually 12 month minimum)
3. Budget Guidelines
– Zero Base or (not preferred) Revision of Prior Budget
4. Preparation of Initial Proposal
5. Negotiation of Final Budget (incorporation of input from those affected)
6. Review and Approval
7. Revision After Implementation
8. Evaluation
– Budget Hierarchy