largest of the three operating units of Polysar Limited. The primary users of its products‚ such as butyl and halobutyl‚ are manufacturers of automobile tires; other users are from various industries. In 1986‚ Rubber group contributed 0.8 billion which is 46 percent of the company annual sale. The operation of the group is divided into four divisions‚ NASA (North America and South America) and EROW (Europe and rest of the world)‚ Research department and Global Marketing department. NASA and EROW
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3 Cost-Volume-Profit Analysis Learning Objectives 1. Explain the features of cost-volumeprofit (CVP) analysis 2. Determine the breakeven point and output level needed to achieve a target operating income 3. Understand how income taxes affect CVP analysis 4. Explain how managers use CVP analysis in decision making 5. Explain how sensitivity analysis helps managers cope with uncertainty 6. Use CVP analysis to plan variable and fixed costs 7. Apply CVP analysis to a company producing multiple
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The role of a financial manager is a complex one‚ requiring both an understanding of how the business functions as a whole and specialized financial knowledge. The head of the financial operations is called the chief financial officer (CFO). The structure of the company varies‚ but a financial manager is responsible for the same general things across the board. The manager is responsible for managing the budget. This involves allocating money to different projects and segments so that the business
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PROBLEM The Coca-Cola organization is stuck in a mind-set formed during its heyday in the 1980s and 1990s‚ when Goizueta made Coke into a growth story that captivated the world. An unwillingness to tamper with the structures and beliefs formed during those glory years has left the company unable to adapt to consumer demands for new kinds of beverages. TIMELINE 1986 Then Coke President Donald R. Keough The “49% solution” by then Chief Financial Officer M. Douglas Ivester Spun off its U.S
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Generally‚ the term cost of production refers to the ‘money expenses’ incurred in the production of a commodity. But money expenses are not the only expenses incurred on the production of a commodity. There are number of services and inputs such as entrepreneurship‚ land‚ capital etc.‚ which are offered by an entrepreneur without changing any price or receiving any payment for them. While computing the total cost of production‚ allowance should be made for such expenses. It is therefore essential
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provide useful insights to modern-day managers. In general terms‚ globalization is the international integration of intercultural ideas‚ perspectives‚ products/services‚ culture‚ and technology. This has resulted in large scale interdependence between countries‚ as specialization (arguably the root cause of globalization) allows for specific regions to leverage their natural resources and abilities to efficiently produce specific products/services with which to trade for another country’s specialization
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Time-phased project work is the basis for project cost control. Work package duration is used to develop the project network. Further‚ the time-phased budgets for work packages are timetabled to establish fiscal measures for each phase throughout the project. The time-phased budgets are to emulate the real cash needs of the budget‚ which will be used for project cost control. This information is useful to estimate cash outflows. The project manager’s attention is on when the costs are to occur‚ when
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products. Chuck questioned if the current cost-management system was providing the management with accurate data about product costs. In a traditional‚ volume-based product-costing system‚ only a single predetermine overhead rate is used. All manufacturing-overhead costs are combined into one cost pool‚ a grouping of individual indirect cost items‚ and they are applied to products on the basis of a single variable that costs over a given time span (cost driver) that is closely related to production
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THE COST AND SALES CONCEPT Cost is defined as a reduction in the value of an asset for the purpose of securing benefit or gain. Cost is defined in a hotel and restaurant as the expense to a hotel or restaurant for goods or services when the goods are consumed or the services are rendered. KINDS OF COSTS 1. Fixed costs – are those that are normally unaffected by changes in sales volume. They are said to have little direct relationship to the business volume because they do not change
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Cost Accounting – Classification of costs Cost accounting refers to a process of accumulating‚ recording‚ classifying and analyzing all costs incurred at various levels of production. The purpose of cost accounting is manifold. It provides a final selling price‚ suggests the best possible course of action where maximum savings are possible and a strategy for future. Cost accounting is also constructive in comparing the input and output results that ultimately aids the management to arrive at a financial
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