The following report for MDE bird feeder division includes the classification of costs such as product costs, period costs, fixed costs, and variable costs. This report also includes a cost-volume-profit analysis to determine contribution margin as well as the breakeven point for this company. A budgeted model is also included to show actual activity and is compared to the flexible budget. Budgeting process, budget variances and the recommendation to use the activity based costing system will also be discussed. The above will allow for a quantitative analysis, which will include areas that need improving along with recommendations for this company.
When conducting an analysis is important to classify costs. Product costs are costs that are assigned to a product for a specific purpose. These costs are associated directly in the making of a specific product. The bird feeder division has the following product costs: material-cedar, material-plastic, factory worker labor, materials-indirect, factory depreciation, factory utilities, and factory maintenance and repairs. Period costs are all costs in the income statement other than cost of goods sold. These costs are usually associated with the selling function of the business. The bird feeder division has the following period costs: shipping, sales commissions, office rent, advertising, liability insurance, office depreciation, and office salaries. After determining if costs are either product or period costs it is important to
Management does not have to deal with these expenses because they have already occurred in the past, and must be paid whether the project is started or not. Overhead expenses would be considered as a significant incremental cash flow because any extra capital and labor required will be counted to help the company keep up with increasing demand (80% of the market). However, any overhead expenses that did not change due to the acceptation of the project will not be included. About 90 each year was actually included in the overhead expenses. Erosion of the Jell-O contribution margin would be considered an incremental cash flow and must be included in the cost analysis. It was anticipated by General foods that if the project was undertaken, 80% of its sales would arise from growth of the dessert market share or powder segment and the other 20% would come from the erosion. If the Super Project was not accepted, the sales
A builder is a person who constructs something by putting parts or material together over a period of time. They follow orders on how to construct the build or just completely does it on their own. Every since I was growing up, I was very fond of putting things together. Starting from putting in the correct letter, shaped like a block, to the corresponding hollow shaped mold of the letter to free making starships and planes with lego bricks. Whenever I start I build, there is a switch at the back of my head that turns on fully committed mode on. Even on a simple wooden bird house, I would spend hours on handcrafting it to make it the best bird house there is. If I see a slight mistake, I would be forced to redo and start over since I just can't
Some of the operating expenses incurred would be selling, general, and administrative; also research, development, and engineering. They are treated as period costs because as they are accrued or incurred, they are allocated for a designated period an labeled as period costs. Two common examples of period costs are Marketing/Selling and Administrative. Such costs usually occur either after the manufacturing stage or outside the factory.
Product production comes with many types of costs. Four of the most common costs are prevention costs, appraisal costs, internal failure costs and external failure costs. These four costs are called quality costs and are costs that all businesses that produce products will pay. The amount of money that will go to each cost is dependent on the amount spent on the other costs. In other words, an increase in one type of cost can result in a decrease in another. Businesses need to understand the nature of each cost in order to understand for which cost to budget.
Develop and diagram an activity based cost model using the information in the case. Provide your best estimates about the cost and profitability of Wilkerson’s three product lines. What difference does your cost assignment have on reported product costs and profitability? What causes any shifts in cost and profitability?
While we are performing our analysis on different aspects of the company, we look at the three main types of cost. When we remain devoted to improving our costs, and the faults related, we show our same devotion to our consumers. This is portrayed by the quality of products we put on the shelves. Prevention costs, appraisal costs and Failure costs are areas
The number of significant costs is small. The major ones are: advertising, Market Research and product development. However, concentrate producers
Period cost are cost related to selling and administrative expenses. Product cost are costs related to manufacturing of goods. Classifying period cost as product cost will decrease the expenses, thus increase the operating income.
What attracts us to the movie theatre on Friday nights? Is it the commercials we see? Or is it all the gossip we hear from friends and TV talk shows? Well for many, it is the critiques we read and hear almost every day. One who specializes in the professional evaluation and appreciation of literary or artistic works is a critic. The profession of movie criticism is one of much diversity. Reviews range anywhere from phenomenal to average. Not only are movies created for the entertainment and sheer pleasure of the audience, they create a market of jobs and open doors to the world of financial growth. The success of these films, whether they are tremendous or atrocious, is not only dependent of the actual film, but
Generally, product expenses include all those costs associated with the acquisition, manufacture or production of a product. Drury (2007)
According to this method, every unit of the product is assigned all direct, fixed, and variable costs. This method includes the cost of direct materials and labor as well as a portion of the overhead costs associated with it in the final costing of every unit of the product.
John Deere Component Works (JDCW), subdivision of John Deere and Co. was in charged specifically of the manufacturing of tractor component parts. The demand for JDCW’s products had problems due to the collapse of farmland value and commodity prices. Numerous and constant failures in JDCW’s competition for bids, alerted top management to start questioning their current costing methods. As an outcome, the analysis has to be guided to research on the current costing methods with the intention of establishing legitimacy and to help the company in adopting a more appropriate costing system.
In our bird feeding lab, we observed two feeding stations that was an open feeder surrounded with a fall season, setting and a shelter feeder with a shrub environment. We observed each feeding station where several birds flew and used up in the feeding tray like the white throat sparrow or the blue jay. However, my group solely focused on the white throat sparrow and we hypothesized that there is no relationship between looks and pecks within the feeding apparatus and the alternative hypothesis is that there is a relationship between looks and pecks within the feeding apparatus. After watching, recording and graphing and making out a statistical test, we came to the end that the two tailed p-values for open and closed feeders are less than
First, we have identified if there is really an insufficiency in the amount of selling prices set by the Sales Department, in reference to Exhibit 1 of the case. We did this through identifying the maximum amount of overhead costs that the company can incur for the three products and comparing it with the total overhead costs. See Table 1 for details.
The pheasant is a very interesting bird. My first point, The pheasants are at risk of endangerment. Secondly, There are approximately 49 different types of the pheasant. Last, Some of the most beautiful birds are classed in the pheasant family. With these points I hope that you can agree that the pheasant is a very interesting bird.