Unit 7 P1 Direct costs A cost that can be directly related to producing specific goods or performing a specific service. For example‚ the wages of an employee engaged in producing a product can be attributed directly to the cost of manufacturing that product. Variable costs Variable costs means the cost of production (cost of labour‚ material or overhead) that change according to the change in the volume of production units. Combined with fixed costs‚ variable costs make up the total cost of
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Management Accounting Absorption vs Marginal Costing Report 20813287 Absorption vs. Marginal Costing (Atmospheric Ltd) Contents Page No Memorandum 3 Marginal (Variable) Costing 4 Absorption
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GAAP and IFRS both view depreciation as allocation of cost over an asset’s life. There are three steps of the depreciation process: firstly find depreciable base of the asset‚ and then estimate asset’s useful life and last choose a method of cost apportionment that best matches revenue flow from the asset. Depreciation methods allowed under U.S. GAAP include straight-line‚ units of production‚ or accelerated methods (sum of digits or declining balance). Component depreciation is allowed but not commonly
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Cost accounting deals with ascertainment ‚ allocation ‚ apportionment accounting aspect of costs.Management accounting deals with the effect and impact of costs on the business. 2. Cost accounting provides a base for management accounting whereas management accounting is derived from cost accounting and financial accounting. 3. Cost accounting does not include financial accounting ‚ tax planning and tax accounting. Management accounting includes financial and cost accounting ‚ tax accounting
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Statistical Sampling Statistical Sampling 1. The authors of the paper make assumptions about the U.S. population on three dimensions. What are the three dimensions? (Hint: The authors refer to these dimensions as "components of change.") Answer: The three dimensions would be migration‚ fertility‚ and mortality. 2. What is the expected population of the U.S. in 2050 given the new series (i.e.‚ based on 1998 data) based on the lowest series? The middle series? And the highest
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What is profit tax? According to Inland Revenue Ordinance s 14 “Charge of profits tax”‚ profit tax is chargeable on every person: Carrying on a trade‚ profession or business in Hong Kong; and In respect of his assessable profits arising in or derived from Hong Kong from such trade‚ profession or business.1 What is person? A person may include: A corporation; Partnership; Trustee‚ whether incorporated or unincorporated; and Body or persons.2 In this case‚ the Taxpayer (“T”) is a private company
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expense in the statement of comprehensive income. Costs that relate to both share issuance and listing should be allocated between those functions on a rational and consistent basis (IAS 32.38). In the absence of a more specific basis for apportionment‚ an allocation of common costs based on the proportion of new shares issued to the total number of (new and existing) shares listed is an acceptable approach. IAS 32.37 requires that: "The costs of an equity transaction are accounted for as
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Explain how an organisation can cost a product and determine its price at any activity level The main costs and elements that a business needs to consider‚ taking into account the nature of these costs as well are: * Expense of buying vehicles or maintaining it * Mortgage * Business Rates * Wages Extra / Wages * Drawings * Advertising * Insurance * Loan repayment interest * Loan repayment capital * Purchases / VAT on purchases * VAT paid to C & E
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Lorson Manufacturing Company Case Study Executive Summary Lorson Manufacturing Company is actively seeking to implement tighter cost control measures in an industry that is largely governed by prices. The purpose of this report is to present and analyse a new costing system proposed by Mr. Jan Lorson for the valve department of the company‚ and compare it to the existing system‚ in order to judge whether to go forward with its implementation. The analysis uses a number of examples to highlight
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MB0041/MBABF –Financial and Management Accounting Assignment Q3. Draw the Balance Sheet for the following information provided by Sarawath Ltd.. a. Current Ratio : 2.50 b. Liquidity Ratio : 1.50 c. Net Working Capital : Rs.300000 d. Stock Turnover Ratio : 6 times e. Ratio of Gross Profit to Sales : 20% f. Fixed Asset Turnover Ratio : 2 times g. Average Debt collection period : 2 months h. Fixed Assets to Net Worth : 0.80 i. Reserve and Surplus to Capital : 0.50 | Balance Sheet Liabilities
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