Case Study: CVS

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WEEK 1 DQ 1 The company I chose to write about is CVS. The link to the financial statements is From looking at this company's balance sheet, I can see that this company has $200 less in September 2012 than in December of 2011. This company has paid more in 2012 as well from last year, had an increase in total current liabilities and has $300 less in other current assets for 2012. This company has remained the same in terms of debt, goodwill and property and equipment. This tells me as an investor that this company has maintained themselves without a drastic drop, which shows this company to be stable. The shareholders equity for the most part did…show more content…
An activity can have more than one cost driver attached to it. For example, a production activity may have the following associated cost-drivers: a machine, machine operator(s), floor space occupied, power consumed, and the quantity of waste and/or rejected output. (, 2013)" I think the company would do better with Activity Based Costing (ABC) because this allocation method is more accurate because it takes all cost related factors into consideration. The first way the company was allocating department costs was and even three way split, which was undercutting Fabricating, which needs more funds, and this method was overcompensating Laminating and Assembling, which require less. With the ABC Method, the costs are factored by the different cost drivers, such as machinery, staff, number of parts needed, amount of products made, as well as direct material costs and direct labor hours. This information will definitely help when it is time to make departmental budgets. This provides the departments that need more labor and/or materials with the proper budget that they need to run smoothly. The ABC Method will in turn save the company a lot of money since the money in use is being spent in a more constructive…show more content…
This type of budget is different from a static budget, where the amounts are fixed. All types of organization can use a flexible budget, however, the manufacturing, retail, service industries and non-profit organizations will primarily use this kind of budget. A flexible budget can be useful for organizations that can expect a change in activity. For example, a retail store. during the year sales may be slower, and the flexible budget will allot for that. At different points in the year, like holidays, this kind of budget will accommodate the extra business as everyone prepared for the

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