Cost & Management Accounting - at What Level of Sales Will the Company Be Able to Maintain Its Present Pre-Tax Profit Provision Even After Expansion

In: Other Topics

Submitted By casestudyhelp365
Words 543
Pages 3
Need Answer Sheet of this Question paper, contact aravind.banakar@gmail.com www.mbacasestudyanswers.com
ARAVIND – 09901366442 – 09902787224

COST & MANAGEMENT ACCOUNTING

CASE STUDY : 1

J P Ltd manufacturers of a special product, follows the policy of EOQ for one of its components. The components’s details are as follows.

Purchase price per component, Rs 200
Cost of an order Rs 100
Annual cost of carrying one unit in inventory,
10 per cent of purchase price
Annual usage of components, 4000
The company has been offered a discount of 2 per cent on the price of the component provided the lot size is 2000 components at a time.

Q2) Advise whether the quantity discount offer can be accepted (assume that the inventory carrying cost does not vary according to discount policy).

Q3) Would your advise differ if the company is offered 5 per cent discount on a single order?

Q4) Explain the term EOQ?

CASE STUDY : 2

In an engineering concern, the employees are paid incentive bonus in addition to their normal wages at hourly rates. Incentive bonus is calculated in proportion of time taken to time allowed, of the time saved. The following details are made available in respect of employees X, Y & Z for a particular week.

Q1) You are required to work out for each employee the amount of bonus earned?

Q2) Explain the term incentive?

Q3) You are required to work out for each employee the total amount of wages received?

Q4) You are required to work out for each employee the total wages cost per 100 units of output?

Q2) Explain the term incentive?

CASE STUDY : 3

Following particulars have been extracted from the books of Supreme Engineers Ltd.

[pic]

Q1) You are required to compute the quantum of wages under Halsey Scheme and Rowon Scheme?

Q2) Which of these schemes would you like to introduce in this company if the time…...

Similar Documents

Corporate Financial Accounting and Reporting

...Corporate Financial Accounting and Reporting Tim Sutton second edition Corporate Financial Accounting and Reporting We work with leading authors to develop the strongest educational materials in business and finance, bringing cutting-edge thinking and best learning practice to a global market. Under a range of well-known imprints, including Financial Times Prentice Hall, we craft high quality print and electronic publications which help readers to understand and apply their content, whether studying or at work. To find out more about the complete range of our publishing please visit us on the World Wide Web at: www.pearsoned.co.uk Corporate Financial Accounting and Reporting Second Edition Tim Sutton Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk First published 2000 Second edition published 2004 © Financial Times Management 2000 © Pearson Education Limited 2004 The right of Timothy G. Sutton to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs, and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the......

Words: 163377 - Pages: 654

Cost Accounting or Cost-Volume-Profit Accounting

...ACC501 Cost Accounting.txt Cost Accounting or Cost-Volume-Profit Accounting ACC501 - Accounting for Decision Making Module 2 - Case Abstract This paper contains a brief overview of the current primary accounting standard GAAP but also explores CostVolume-Profit analysis and Cost Accounting. In the 1980s accountants and financial managers embraced technology and became the basis for the Personal Computer’s (PC) explosive expansion. The abilities of the computer coupled with the needs of business management supported the development of many new accounting tools and processes. There is universally true method of accounting. The accounting method(s) used in an organization must be acceptable to an internal or external auditing group and flexible so that management can maximize the resources available to the company. With our modern high-speed data processing systems we have the luxury of being able to look at our data in different ways. The “Generally Accepted Accounting Principles” (GAAP) has been the accounting method of choice when preparing statements for viewing by third parties, including both investors and government regulators. This is not to say that the information generated for GAAP accounting statements is not valuable to the leadership of a corporation. Rather, there are additional styles or accounting types that may be more valuable internally, allowing the managers and their Page 1 ACC501 Cost Accounting.txt staff to maximize utilization of......

Words: 972 - Pages: 4

What?

...ahead UPS ANNUAL REPORT 2007 2007 HIGHLIGHTS Reached a five-year labor agreement with the International Brotherhood of Teamsters 10 months prior to the expiration of the current contract in July 2008. Adopted a new financial policy in early 2008 to enhance shareowner value by reducing the company’s cost of capital. Celebrated our 100th anniversary on August 28, 2007. Introduced several industry-first product innovations, including UPS Delivery InterceptSM, UPS PaperlessSM Invoice and international UPS Returns®. Increased profits by $276 million in our Supply Chain and Freight segment. Grew international export package volume over 10 percent. moving more than packages At UPS, we pride ourselves on helping customers move ahead. Large or small, every customer benefits from the same integrated transportation network and the same can-do spirit that is a way of life at UPS. Today, more than ever, customers need a shipping and logistics company that they can count on for the fast, reliable service they need to grow their businesses. CONTENTS 3 Chairman’s Message 7 Our Corporate Commitment 8 Products and Services 10 Customer Stories 12 Board of Directors and Senior Management 13 Annual Report Form 10-K UPS FACTS Founded: Employees: Customers: Online tracking: Operating facilities: Jet aircraft: Package delivery vehicles: Freight vehicles: Retail access: 1907 425,300 7.9 million 18.5 million daily requests 3,000 worldwide 268 (world’s ninth-largest airline) 93,600......

Words: 54529 - Pages: 219

Financial Management

...FINANCIAL MANAGEMENT- 12MBA25 FINANCIAL MANAGEMENT 12MBA25 VTU SECOND SEMESTER FINANCIAL MANAGEMENT- 12MBA25 MODULE -1 FINANCIAL MANAGEMENT Financial management is an academic discipline which is concerned with decision-making. This decision is concerned with the size and composition of assets and the level and structure of financing. In order to make right decision, it is necessary to have a clear understanding of the objectives. Such an objective provides a framework for right kind of financial decision making. The objectives are concerned with designing a method of operating the Internal Investment and financing of a firm. There are two widely applied approaches, viz. (a) profit maximization and (b) wealth maximization. The term 'objective' is used in the sense of an object, a goal or decision criterion. The three decisions - Investment decision, financing decision and dividend policy decision are guided by the objective. Therefore, what is relevant - is not the overall objective but an operationally useful criterion: It should also be noted that the term objective provides a normative framework. Therefore, a firm should try to achieve and on policies which should be followed so that certain goals are to be achieved. It should be noted that the firms do not necessarily follow them. Profit Maximization as a Decision Criterion Profit maximization is considered as the goal of financial management. In this approach, actions that Increase profits should be undertaken......

Words: 21079 - Pages: 85

Financial Accounting

... FFA PAPER F3 FINANCIAL ACCOUNTING BPP Learning Media is the sole ACCA Platinum Approved Learning Partner – content for FIA and ACCA qualifications. In this, the only FFA/F3 study text to be reviewed by the examiner:        We highlight the most important elements in the syllabus and the key skills you will need We signpost how each chapter links to the syllabus and the study guide We provide lots of exam focus points demonstrating what the examiner will want you to do We emphasise key points in regular fast forward summaries We test your knowledge of what you’ve studied in quick quizzes We examine your understanding in our exam question bank We reference all the important topics in our full index I N T E R A C T I V E T E X T BPP’s Practice & Revision Kit, i-Pass and Interactive Passcard products also support this paper. Note FIA FFA and ACCA Paper F3 are examined under the same syllabus and study guide. FOR EXAMS FROM FEBRUARY 2013 TO JANUARY 2014 FFA/F3 FINANCIAL ACCOUNTING First edition March 2011 Second edition September 2012 ISBN 9781 4453 9966 9 Previous ISBN 9781 4453 7305 8 eISBN 9781 4453 9242 4 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place 142-144 Uxbridge Road London W12 8AA www.bpp.com/learningmedia Printed in the United Kingdom by Printers Polestar Wheatons Hennock Road Marsh Barton Exeter EX2 8RP......

Words: 166751 - Pages: 668

Cost Management

...1: MANAGEMENT ACCOUNTING Introduction: Accounting may be broadly classified into two categories – accounting which is meant to serve all parties external to the operating responsibility of the firms and the accounting which is designed to serve internal parties who take care of the operational needs of the firm. The first category which is conventionally referred to as financial accounting, looks to the interest of those who have primarily a financial stake in the organization’s affairs – creditors, investors, employees etc. On the other hand the second category of accounting is primarily concerned with providing information relating to the conduct of the various aspects of a business like cost or profit associated with some portions of business operations to the internal parties viz., management. This category of accounting is called as Management accounting. In order to perform the primary task of decision making managers of business enterprises need information about the past, present and future in the functional areas of management such as personnel, finance, marketing and production. Right decision making has to be based on quantitative and qualitative information. The management thus constantly needs accounting information to base its decisions upon. Thus management accounting provides the information needed by management personnel. Definition: The Institute of Chartered Accountants of England has defined management accounting as: “Any form of accounting......

Words: 9629 - Pages: 39

Accounting for Corporate Income Tax

...What is a liability? The answer might seem rather obvious: an amount owed from one entity to another. If the liability bears interest, how is interest expense measured? The simple answer is that interest expense is equal to interest paid. However, life can get a lot more complicated:  Does a liability exist if there is no legal liability, but the company has announced a particular commitment or plan of action?  How is a liability measured if the obligation is for services, not a set amount of money?  How can a liability be measured if the amount of cash to be paid is uncertain?  How should a liability be valued if the stated interest rate does not reflect the market interest rate?  How is interest expense measured if the stated interest rate does not reflect the market interest rate?  When is interest part of the cost of an asset instead of an expense? Liability financing is an integral part, perhaps even a dominant part, of the capital structure of many companies. For example, Shaw Communications Inc. reported total assets of $8.9 billion in 2009. Of this amount, only $2.5 billion is financed through shareholders' equity, with the balance, $6.4 billion, provided by debt in various forms. A sizeable portion of the debt is unearned revenue and deposits ($0.8 billion, or 9% of total assets) and long-term debt is 35% of total assets. Interest expense is reported at $237 million, eating up a significant portion of the reported $956 million in operating earnings.......

Words: 34356 - Pages: 138

Fundamental of Cost Accounting

... Fundamentals of Cost Accounting 3e William N. Lanen University of Michigan Shannon W. Anderson Rice University Michael W. Maher University of California at Davis FUNDAMENTALS OF COST ACCOUNTING Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2011, 2008, 2006 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 WVR/WVR 1 0 9 8 7 6 5 4 3 2 1 0 ISBN MHID 978-0-07-352711-6 0-07-352711-4 Vice president and editor-in-chief: Brent Gordon Editorial director: Stewart Mattson Publisher: Tim Vertovec Director of development: Ann Torbert Development editor: Emily A. Hatteberg Vice president and director of marketing: Robin J. Zwettler Marketing director: Sankha Basu Marketing manager: Kathleen Klehr Vice president of editing, design and production: Sesha Bolisetty Senior project manager: Susanne Riedell Senior production supervisor: Debra R. Sylvester Interior......

Words: 73102 - Pages: 293

Ca - Management Accounting

...Unit 1: Role and Scope of management accounting 1.1The Role of the Management Accountant |Content |CLP |Text |Worked Example/Activity Ref | | | | | | |What is it? Provision of info financial and non-financial to decisions makers usually in|Pg 9 | |Activity 1 - the role of the| |the organisation | | |decision maker | | | | | | |Thought Process: | | | | |understanding what is required | | | | |calculating or compiling the information required | | | | |analysing, interpreting or understanding the information obtained | | | | |Making recommendations and drawing conclusions | | ...

Words: 28074 - Pages: 113

Management Accounting

...MANAGEMENT ACCOUNTING Study Material Prepared By INSTITUTE OF COST AND WORKS ACCOUNTANTS OF INDIA for Junior Accounts Officer(Civil) Examination Conducted By CONTROLLER GENERAL OF ACCOUNTS 1 BASICS OF COST ACCOUNTING 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 ♦ ♦ Evolution of Cost Accounting, Cost Concepts and Cost Classification Introduction Evolution of Cost Accounting Financial Accounting and Cost Accounting Management Accounting Financial, Cost and Management Accounting Cost Concept and Cost Object Cost Management Cost Classification Methods of Costing Techniques of Costing Specific Cost Systems Cost Department and its relationship with other Departments Installation of Costing System Specimen Questions with Answers Test Yourself Page . No 1 1 2 3 4 .5 6 7 10 12 13 14 16 17 18 20 1.0 EVOLUTION OF COST ACCOUNTING, COST CONCEPTS AND COST CLASSIFICATION 1.1 INTRODUCTION Traditionally, cost accounting is considered as the technique and process of ascertaining costs of a given thing. In sixties, the definition of cost accounting was modified as ‘the application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control and ascertainment of profitability of goods, or services’. It includes the presentation of information derived therefrom for the purpose of managerial decision making. It clearly emphasises the importance of cost accountancy achieved during the period by using cost concepts in...

Words: 102642 - Pages: 411

Cost & Management Accounting - Advise Whether the Quantity Discount Offer Can Be Accepted Assume That the Inventory Carrying Cost Does Not Vary According to Discount Policy

...mbacasestudyanswers.com ARAVIND – 09901366442 – 09902787224 COST & MANAGEMENT ACCOUNTING CASE STUDY : 1 J P Ltd manufacturers of a special product, follows the policy of EOQ for one of its components. The components’s details are as follows. Purchase price per component, Rs 200 Cost of an order Rs 100 Annual cost of carrying one unit in inventory, 10 per cent of purchase price Annual usage of components, 4000 The company has been offered a discount of 2 per cent on the price of the component provided the lot size is 2000 components at a time. Q2) Advise whether the quantity discount offer can be accepted (assume that the inventory carrying cost does not vary according to discount policy). Q3) Would your advise differ if the company is offered 5 per cent discount on a single order? Q4) Explain the term EOQ? CASE STUDY : 2 In an engineering concern, the employees are paid incentive bonus in addition to their normal wages at hourly rates. Incentive bonus is calculated in proportion of time taken to time allowed, of the time saved. The following details are made available in respect of employees X, Y & Z for a particular week. Q1) You are required to work out for each employee the amount of bonus earned? Q2) Explain the term incentive? Q3) You are required to work out for each employee the total amount of wages received? Q4) You are required to work out for each employee the total wages cost per 100 units of output? Q2)......

Words: 543 - Pages: 3

Profit Planning: Cost-Volume-Profit Analysis

...Chapter 9 Profit Planning: Cost-Volume-Profit Analysis Cases |9-1 |Cost-Volume-Profit Analysis and Strategy | |9-2 |Cost-Volume-Profit Analysis and Cost Estimation | |9-3 |Cost-Volume-Profit Analysis and Strategy | |9-4 |Cost-Volume-Profit Analysis and Strategy: The ALLTEL Pavilion | |9-5 |Sensitivity Analysis; Regression Analysis | |9-6 |Profit Planning: Choice of Cost Structure | |9-7 |Pancake World | Readings 9-1: “Tools for Dealing with Uncertainty” by David R. Fordham, CMA, CPA, Ph.D and S. Brooks Marshall, CFA. DBA This article explains how to use simulation methods within a spreadsheet program such as Excel to perform sensitivity analysis for a given decision context. The available spreadsheet simulation software systems include the programs Crystal Ball and @Risk, among others. These software systems allow the user to analyze the effect of uncertainty on the potential outcomes of a decision. These tools can be applied directly to CVP analysis. The tools......

Words: 9115 - Pages: 37

Cost Accounting

...Cost Management a s t r a t e g i c e m p h a s i s 5 Fifth Edition Blocher | Stout | Cokins Cost Management A Strategic Emphasis Cost Management A Strategic Emphasis Fifth Edition Edward J. Blocher University of North Carolina at Chapel Hill Kenan-Flagler Business School David E. Stout Youngstown State University Williamson College of Business Administration Gary Cokins Strategist, Performance Management Solutions SAS/Worldwide Strategy COST MANAGEMENT: A STRATEGIC EMPHASIS Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2010, 2008, 2005, 2002, 1999 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 0 9 ISBN 978-0-07-352694-2 MHID 0-07-352694-0 Vice president and editor-in-chief: Brent Gordon Editorial director: Stewart Mattson Executive editor: Richard T. Hercher, Jr. Editorial coordinator: Rebecca Mann Marketing manager:......

Words: 399292 - Pages: 1598

Elements of Tax

...CLASS 1.1 Important concepts Entities – tax versus legal • Tax entities o People, partnerships, joint venture, companies … are considered to be entities for the purposes of calculating income tax. • Legal entities o Companies, which have separate legal personalities, are legal entities. Income flows • Income should be considered as a cash flow stream, where timing is important. • The question is, when the income recognised as earned or deducted (because tax delayed is tax denied)? CLASS 1.2 Patterns of taxation Income tax • Income tax is a progressive system. • Income tax is mainly a rich person’s tax once franking credits are taken into account to produce an “effective tax rate”. • Wealthy people pay less tax overall by reducing their tax burden through using the lower rate paid on capital gains and other tax minimisation schemes. • Total tax as a percentage of GDP is lower in Australia compared to many other countries across the world. However, these results must be considered in light of the high level of income (where it may not be as much of a burden to pay high taxes where there is high income) and quality of public goods provided in counties such as Sweden (which has the highest total tax rate as a percentage of GDP). Justifications for taxation Why do we need taxes? • Public goods argument: the government can provide some benefits to society better than anyone else. Examples include defence, and law and order. • Market......

Words: 34901 - Pages: 140

Tax Accounting

...13 chapter TAX ACCOUNTING OBJECTIVES After completing Chapter 13, you should be able to: 1. List what are permissible tax years. 2. Explain the requirements for changing a tax year. 3. Identify the available accounting methods. 4. Understand the rules for accounting method changes. 5. Account for the capitalization of inventory costs. 6. Describe long-term contract reporting. 7. Defi ne the installment method of accounting. 13–2 CCH FEDERAL TAXATION—COMPREHENSIVE TOPICS OVERVIEW The fi rst 12 chapters are presented primarily from the individual taxpayer’s point of view (including self-employed taxpayers). This chapter provides a general discussion of the previous material as it applies to other entities and provides a discussion of accounting periods and accounting methods as they apply to all entities. Discussions of specifi c provisions as they apply to other entities (e.g., corporations, partnerships, etc.) are contained in subsequent chapters. The term “fi nancial accounting” refers to the reporting of the fi nancial data of an enterprise through fi nancial statements prepared in accordance with generally accepted accounting principles. Income tax accounting, hereafter referred to as “tax accounting,” is concerned with the reporting of fi nancial data to satisfy the requirements of the Internal Revenue Code, the Regulations which interpret the Code, rulings by the IRS which further interpret the Code and Regulations, and the decisions of the courts...

Words: 30831 - Pages: 124