c)Your manager recently attended a seminar where one of the speakersasked the following question 'for short-term decision making, marginalcosting is a far superior technique so why do most companies still usetraditional absorption costing when valuing its inventory'.Discuss the above statement and, in doing so, advise your manager onthe differences between marginal and absorption costing and why youeither agree or disagree with the speaker's statement. Birdie Limited is a manufacturing company producing a variety of golf clubs. Itoperates from one factory that is geographically separated from its head office. Thecomponents for the clubs are assembled in the assembling department; they arethen passed through to the finishing department where they are painted and packed.There are three service cost centres: administration, stores, and manufacturingsupport. The following costs were collected for the year to 31 May 2021:DepartmentAllocated cost centreNumber ofAssemblingFinishingAdministrationoverhead costs (£,000)22560employees671348430089Stores17Manufacturing support12034Additional information:The allocated cost centre overhead costs are all considered to be indirect costsas far as specific units are concerned.During the year to 31 May 2021, 208,000 machine hours were worked in theassembling department, and 270,000 direct labour hours in the finishingdepartment.During the year to 31 May 2021, the stores department received 75,000requisitions from the assembling department, and 50,000 requisitions from thefinishing department. The stores department did not provide a service for anyother department. Stores costs can be apportioned using the number ofrequisitions.Administration costs can be apportioned on the basis of employees.The manufacturing support department carried out 17,000 chargeable hours forthe assembling department, and 9,000 chargeable hours for the finishingdepartment. The manufacturing support department did not provide a servicefor any other department. Manufacturing support costs can be apportionedusing the number of chargeable hours.100 special clubs were produced during the year to 31 May 2021. They took 61machine hours of assembling time, and 134 direct labour hours were worked onthem in the finishing department. Their total direct costs (material and labour)amounted to £2,750.

Answered: Image /qna-images/answer/ebbe0489-93fd-4280-803a-81d6f3f00214.jpg

c) Your manager recently attended a seminar where one of the speakers asked the following question 'for short-term decision making, marginal costing is a far superior technique so why do most companies still use traditional absorption costing when valuing its inventory'. Discuss the above statement and, in doing so, advise your manager on the differences between marginal and absorption costing and why you either agree or disagree with the speaker's statement.

c) Your manager recently attended a seminar where one of the speakers asked the following question 'for short-term decision making, marginal costing is a far superior technique so why do most companies still use traditional absorption costing when valuing its inventory'. Discuss the above statement and, in doing so, advise your manager on the differences between marginal and absorption costing and why you either agree or disagree with the speaker's statement.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A competitor of your company has shifted it cost structure from variable to fix costs, how your competitor handle cost accounting? What ate the advantages of disavantages yiur competitor may have consider before making the change? What is the rationale of making the change in cost structure? Differenciate the types of costs fixed variable step and mixed, explain how fixed costs affects the organazation profitability in situations where sales increase and decrease, summarize how increased level of fixed costs enables the organization to plan more effectively
Please provide this Question solution with explanation and Proper solution
a) Compare and contrast variable cost-plus pricing and target pricing, and indicate the circumstances in which each might be appropriate. b) Compute the selling price based on the compay’s pricing policy and indicate whether the customer’s maximum price is consistent with the company’s pricing policy. c) Assume that further tests have confirmed the product’s useful life, and that SA Berhad wishes to maximise profits by reducing costs. Indicate techniques which could be used to achieve a reduction in the product cost. d) Define Business Process Re-engineering (BPR).
Which one of the following statement is not correct? O Both fixed and variable costs influence short-term decision-making. O Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action. O Opportunity costs are only considered when resources are limited. O Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs.
Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.
please provide explanation of each and examples thank you
Cost management suggest that currently the focus is on proactive versus reactive management. 1. Describe the effect this might have on the way McDonalds determines what items to add to the menu 2. What role do you expect activity accounting(a type of management accounting) has in determing what McDonalds decides to add to the menu