Which one of the following is correct about variable costing systems?

Which of the following are the ways that a company can finance the purchase of assets? (You may select more than one answer. Sin

erica [24]

They can sell some shares

4 0

4 years ago

Question 1 What forces have caused cost and management accounting systems designed decades ago to become less relevant and less

sergey [27]

Answer to Question 1:

The forces that had lessened the importance of the cost and management accounting systems in today's dynamic world are as under:

The ancient bookkeeping and the costing techniques were very time consuming and the accounting systems were also not integrated with the financial accounting systems. Today we have very robust and integrated systems which helps the management of the business operations nation wide with greater security and better performance than the previous old versions.
The complexity of the organization operations have resulted in origination of additional management accounting techniques that were adapted in the form of automated software, that are used to produce management reports on daily, weekly, monthly and yearly basis. The examples include the Throughput costing, Activity based costing, Bench-marking techniques, etc.
The activities automation has led to attaining of maximum efficiency possible in some areas which wasn't possible in the past. The robots management systems, activity automation, etc has increased the fixed cost share in the total cost and the variable cost has become a very minute share of the total cost of the activity. This variable cost which is often referred to as controllable cost, is very less in percentage share of total cost today than 10 years back. In the future, we will see it as a very very very small share of total cost. This makes the today's management costing techniques obsolete and requires new solutions, new techniques, new softwares, etc. to manage the companies operations.

Answer to Question 2:

The target costing is a costing technique that helps to reduce the cost of the company operations by setting cost targets for the operations. The first step under target costing is to set a selling price for the product and the second step is to set the target profit margin. Now at this position we are able to derive the target cost by taking the difference of profit margin and the selling price of the product. At this stage the actions and reforms required to achieve this target cost are determined and implemented in the current operating activities. The best part of the target costing is that it says that the pricing though matters but the main aspect of a product success is its cost controls. If the company is able to control the cost of the product then it can control the movement of prices in the market. So target costing specially focuses and stresses upon cost control procedures.

As Target costing is all about cost controlling and can be applied to any sector. In Ghana, target costing will help to control the cost of the services that the banking sector renders to its customers. This reduction in services cost can be achieved by automation, installation of new softwares, Investing in automated teller machines, etc. By gaining efficiencies, the banking sector will substantially reduce its cost thus achieving its target cost.

By achieving the target cost the bank will have to sell at the same rate as the bank had invested its time and money in efficiency gaining activities. There are a lot of activities and products that can be automated and that can help to achieve the target cost. For example, promoting internet banking will reduce the cost of ATM management, paper cost, management time, additional branch opening or extension of building, etc. We can see how easily internet banking will assist the banking sector to achieve its target costs.

5 0

3 years ago

A region is in the middle of a very cold and snowy winter. As a result, hot chocolate has become more desirable, and many of the

Liula [17]

Answer:

2

Explanation:

As a result of the weather, the demand for chocolate increases. the demand curve shifts to the right. there is an increase in equilibrium price and quantity

As a result of the channels closing, the supply of imported cocoa falls. As a result, supply decreases. the supply curve shifts to the left

5 0

3 years ago

Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has investe

gtnhenbr [62]

Answer:

Crawford Construction

1. Crawford Construction sold and replaced its inventory:

a. 4.14 x

2. With Construction Industry Inventory Turnover Ratio as 4.55x, Crawford Construction:

b. Crawford Construction is holding more inventory per dollar of sales compared to the industry average

Explanation:

a) Data and Calculations:

Quick ratio = 2.00x,

Cash = $36,225

Accounts receivable = $20,125

Inventory = x

x= $80,500 - 36,225 - 20,125 = $24,150

Total current assets = $80,500

Total current liabilities = $28,175

Annual sales = $100,000

Using annual sales instead of cost of goods sold to calculate the inventory turnover, = Turnover/Inventory = $100,000/$24,150 = 4.14x

b) Quick ratio equals (Current assets - Inventory)/Current Liabilities. Computing the quick ratio in place of the current ratio can be used to identify how Crawford Construction can meet its current (short-term) debts without selling inventory and recovering funds from the sale.

c) The Inventory Turnover Ratio divides the cost of goods sold by the average inventory. The Sales value can approximate the cost of goods sold. The ratio shows the efficiency of Crawford Construction in handling its inventory. The higher the value of the ratio, the better, showing that Crawford is more efficient when it gets a higher turnover ratio.

7 0

3 years ago

One benefit of specialization is that it

tiny-mole [99]

-Whenever countries have different opportunity costs in production they can benefit from specialization and trade.
-Benefits of specialization include greater economic efficiency, consumer benefits, and opportunities for growth for competitive sectors.

8 0

3 years ago