Prestige Data Services. Mr. Rowe believes it is possible the accounting reports do not reveal the contribution the Data Service has provided and also the accounting for separate activities may obscure the costs and benefits provided. Therefore we have used the exhibits provided to analyze and come to a conclusion whether Prestige Data services should be shut down or allowed more time to show its contribution. Analysis 1) The first thing we noticed is that fixed and variable costs are included in the
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Foxy Originals 1. Discuss the pros and cons to launching the Foxy brand in the U.S. Pros: Kluger and Orol had established strong Foxy jewelry market in Canada but it is getting saturated. By expanding into the United States Foxy would be able to avoid oversaturation of the Canadian market. The U.S. jewelry market was almost 10 times larger than the Canadian market which offers great opportunity for their product exposure. With this expansion‚ Kluger and Orol could expand their production as
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Depends on point of view‚ what are you looking at. The former can be easily traced to a specific and indirect cannot. Opportunity costs: cost of giving up alternatives‚ not measured by acct systems‚ may change a decision Sunk costs: costs already incurred‚ cannot be changed by any decision COST behavior‚ fixed vs. variable “in the long term‚ all costs are variable” VC: increase as number of units increases‚ based on level of activity FC: remain same over range of activity‚ “relevant range”
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Managerial Accounting and Control Decision Making: Relevant Costs and Benefits Case 14-62 Submited to: Prof. Virgilio c. Avila Submitted by: Roy Kondoy Shella Faye Background of the Study Sportway Corporation Sportway is a wholesale distributor supplying a wide range of moderately priced sports equipment to large chain stores Products: 60% purchased‚ 40% manufactured The company has a Plastics Department that is currently manufacturing molded fishing tackle boxes Sportway
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Berkshire Threaded FastenersBerkshire Threaded Fasteners Company has recently lost their president‚ John Magers. The resulting appointment of his inexperienced son Joe Magers has lead to the company ’s loss of confidence. Brandon Cook is the recently appointed general manger who was hired to turn the company around after a loss of $70‚000 in a good business year. As a member of an outside consulting firm I have been called in to give advice on the problems the company is facing. The time period has
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purposes C) to prepare external financial statements D) to attain accurate financial results Answer: A Diff: 1 Terms: cost-volume-profit (CVP) Objective: 1 AACSB: Communication 2) One of the first steps to take when using CVP analysis to help make decisions is: A) finding out where the total costs line intersects with the total revenues line on a graph. B) identifying which costs are variable and which costs are fixed. C) calculation of the degree of operating leverage for the company. D) estimating
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Financial and Ratio Analysis. Vélez Apalancamiento Operativo 5 DOL = 7/16/2010 ΔEBIT ΔSales MC = EBIT Financial and Ratio Analysis. Vélez 6 Example Sales Revenues - Variables Costs and expenses CONTRIBUTION MARGIN - Fixed
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(1) Estimated contribution margins for the next fiscal quarter (000s omitted): Computer Place Poster Paper Napkins Mats Board Total Number of units 30 120 45 80 275 Sales $420 $840 $540 $680 $2‚480 Cost of goods sold: Variable costs 225 612 270 360 1‚467 Contribution margin $195 $228 $270 $320 $1‚013 Unit revenue and costs information: Computer Place
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between changes in activity and changes in total revenue‚ expenses and net profit’ (Drury‚ 2000)‚ it is a very useful tool for managers to consider cost structure and price setting. When used in computer applications the method helps managers to make decisions based on the results by varying different variables such as selling price‚ variables cost‚ etc. This altering of variables to determine the net effect of changing original estimates is called sensitivity analysis. Using the computerized application
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price would be incorrect. If there is spare capacity in the Cushion Division‚ a variable cost as the transfer price is acceptable. Therefore‚ Johnson’s belief would be incorrect because using the market price as the transfer price can lead to incorrect decisions. This is because when the Cushion Division has spare or idle capacity‚ the cost to the company of the transfer is just the variable cost of the item transferred (variable cost of producing the item). However‚ if the market price were to be used as
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