Costing Model: There are two costing models that can be used to allocate costs: traditional costing and activity based costing. Both costing models allocate direct material costs, direct labor costs and manufacturing overhead costs to the products being manufactured. However, the difference between the two models involves how the manufacturing overhead costs are allocated. Traditional costing allocates overhead costs to the products manufactured on the either direct labor hours, number of units produced, or machine hours used in production. The traditional costing method lumps all overhead costs into a single pool and allocates those costs across all products produced based on one of the three cost drivers (direct labor hours, number of units produced, or machine hours).
a. In a direct-financing lease, initial direct costs are added to the net investment in the lease. b. In a sales-type lease, initial direct costs are expensed in the year of incurrence. c. For operating leases, initial direct costs are deferred and allocated over the lease term.
Service businesses typically carry no (or very little) inventory. Retailers and wholesalers normally stock considerable inventory. Manufacturers also carry significant inventories, typically subdivided into three categories: raw material, work in process, and finished goods. 3. The income statements of service business normally have separate sections for operating revenues, operating expenses, and other income (expenses).
Government legislation B. The product market c. The labor market d. Labor market competitors 6. (p. 195) Which of the following factors do not affect an employer's ability to pay high wages? a. product demand b. degree of competition c. productivity of labor D. All of these affect ability to pay 7. (p. 199) All of the following except ___________ is an important factor in defining a market for compensation purposes.
1. Provide the definitions of throughput, inventory and operational expense given in The Goal. How do they compare with the traditional definitions? Do you find them useful, and why? Throughput is the rate at which the system generates money through sales while inventory is all the money that the system has invested in purchasing things which it intends to sell.
. Service firms use similar job costing procedures as manufacturing companies. However, a few slight differences exist. Which of the following is not a difference between job costing for service firms and job costing for manufacturing companies? (Points : 1) Service firms generally use fewer direct materials that manufacturing companies.
Total revenue equals price time’s quantity. It reflects total receipts obtained from selling a certain output or quantity of goods. Total costs is different it’s equal to fixed costs and variable costs. Fixed costs include building and equipment costs, regulatory fees and salaried personnel and remain stable, especially in the short term, but may vary with a longer time horizon. As the time horizon increases, variable costs rely less on existing factors and restrictions and therefore will begin behaving differently which will in turn affect the cost of production (Wright, 2007).
| Outsourcing and offshoring | Outsourcing is the aspect of tasking a third party contractor. Offshoring is basically moving the headquarters of a business to another country. | Investipedia.com | Inventory turnover | The inventory turnover ratio is the inventory sold and replenished over a period of time. | Investipedia.com | Just-in-time inventory (JIT) | A plan that is conducted when receiving and producing inventory; maximizing efficiency of warehousing. | Titman, S., Keown, A. J., & Martin, J. D. (2014).