Cost And Return On Investment

Based on the above calculations, the company should reject the offer. Manufacturing the carburetors is $6 per unit less expensive which calculates to $90,000 less expensive over the period.

* Nobel Prize–winning economist Ronald Coase noted,“The cost of doing anything consists of the receipts that could have been obtained if that particular decision had not been taken.”

Opportunity cost to me is the good in a not so good or absolute best of a situation. For example, I was invited to go out to eat with my cousins, but I had homework that was due. The opportunity cost would be the me spending money on food and missing out on the quality time with my cousins.

Opportunity cost can be defined as the price of a substitute that might be forgone in order to pursue an assured action. The forgone cost. Opportunity cost can also be defined as the best forgone alternative in a scenario where a decision had to be made between some many mutually exclusive or inclusive alternatives (Mankiw, 2009). Simply put opportunity cost is what one is missing out when they make a choice. I could be watching a game of European Soccer or watching a rerun episode of Game of Thrones, but I am doing this assignment, that’s the opportunity cost of doing my assignment.

Technology has become a cornerstone of today’s society so this will also be a huge benefit to the merged companies. Shared technologies from check-in, to baggage tracking, to mobile flight tracking are just a few of the areas that could see improvement by consolidating the resources of both companies. Research and development along with analytics on the companies efficiencies, advancements, and proficiencies within the industry should also increase. Ideas and talent can collaborate on innovations that may at one time seem

This author believes that it may be wiser for Saski to stop pursuing this lawsuit simply because of opportunity costs. Opportunity costs “represent economic benefits that are forgone as a result of pursuing some course of action” (Garrison, Noreen, & Brewer, 2014 p. 545). Assuming that Saski loses the case and does decide to appeal the decision, this author feels that may not be in her best interest. The longer the court case continues the more accurate the overhead and variable figures will be and if the dealership sells more cars than they estimated then it is very likely that those costs will go up.

This case, as the Happy Chips Case does, illustrates the point that it is important to know where your costs and profits come from. It extends the point of Happy Chips by also introducing consideration of asset investments and return on assets. In this case, a new cost accountant introduces segmental profitability, contribution margin, and the strategic profit model to Cooper Processing Company to aid in analysis of two different distribution channels. Note to Instructors: Because this case is short and the required math is quite simple, we often use this case as part of an exam or an in-class quiz!

According to Franchise Help’s facts and figures, the total liquid capital required for a facility would be about a total of $750,000 in capital. By totaling the total number of 150 current facilities operating in the Southwest, Peter Piper Pizza facilities had a total of $112.5M. However, since they this company is a franchise most of the facilities have been created by franchise owners. By calculating the cost of the facility, the supplies, kitchen, entertainment equipment, and layout design all needs to be calculated in the cost analysis. All of this equipment would then end up costing a facility around $750,000. Not only does cost of the facility itself need to analyzed, but also the money required to install a new a marketing strategy in the food delivery service. For instance, the cost of digital presence in the pizza delivery would cost the company around $50,000 in both digital advertising and television advertising.

The costs of the start stage are training costs, rental costs, interest costs, supplies costs (such as papers, powdered ink, stationery… ), utilities cost (such as electronic cost, water cost, cleaning cost, property costs…), depreciation cost, wage cost, facilities cost.

Return on Investments (ROI) is an excellent tool that business professionals use to measure the benefit an organization receives by administrating the training program. The formula for ROI is the ratio of the results divided by the training costs. An example of ROI is the dollar value of productivity divided by training costs. A company benefits from administrating a training program if the ratio of results to costs is high. There are apparently many formulas out there that organizations are using for ROI, but the formula recommended to use for training return on investment would be Training ROI = (Total returns – Training cost) / Training cost (Schmidt). Management in many organizations requires proof that training is financially justified and a good return on investment. If not, then the cost of training may possibly be reduced. It is all about the money that an organization can or cannot afford to use for the purpose of training. There are some critics who feel that ROI is not a necessity, whereas there are some critics who feel that ROI is an important necessity for an organization now more than ever.

Therefore, marginal cost is the slope of the TC or the TVC curve. MC Curve

When you can measure what you are speaking about and express it in numbers, you know something about it; but when you cannot measure, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of science, whatever the matter may be.

This is the project which mainly helps us to know how important the concept of Cost savings is important for each and every department of the company. The steps to be followed in order to make aware of cost savings how it helps both the company and an individual employee. The effects of it in a worthy way depraved way in the view of employee.

All businesses work with the main objective of making a profit. The determination of the profitability of the businesses will depend on the assessment of various factors of production as they contribute to the final income. The most primitive way of expressing the profit of a firm is through the subtraction of the costs from the revenues. Fixed cost is costs that are not changeable over a long period of time while the variable costs do change as time changes. Traditionally, the statement of accounts and profitability only took into consideration the interplay between the two factors- costs and revenues. In this traditional statement, variable costs and fixed cost were treated similarly. The separation of the costs as either fixed cost or variable cost came into being with the advent of the margin statement. In simplest terms, contribution margin has been used to indicate the result of excess between the revenues and the variable costs. The contribution margin is therefore, an in-depth statement of profit to take to account a lot of other financial variables in the like revenues, expenses, profits, and losses among others. Gross profit is a crude profit since it does not entirely belong to the company’s revenue. These are some of the loopholes in the accounting that the contribution margin exists to seal and it does this through the consideration of net profit in the accounting period other than the gross profit. The most important application of the contribution

➢ Only direct costs are controllable for various responsibility centers. Indirect costs are not controllable.