Management accounting: Wilkerson Company is in the business of manufacturing valves, pumps, flow controllers etc. Severe industry wise price cuts in the pumps business, which is Wilkersons major product line, has badly affected the company
Wilkerson Company Introduction Wilkerson Company is in the business of manufacturing valves, pumps, flow controllers etc. Severe industry wise price cuts in the pumps business, which is Wilkerson's major product line, has badly affected the company's margins (Gross Margin of 19.5% as against a planned gross margin of 35%). On the other hand the flow controllers division was performing above the expected profits (yielding a Gross Margin of 41%, a value higher than 35% estimated). Wilkerson needs to identify the proper mix of its product line to regain its profitability. This is to be done based on information provided in the case, regarding pricing decisions, decision to discontinue or continue a product and product design. A detailed analysis of the problems faced by Wilkerson Company is as follows. Analysis Based on the operating results of March 2000, we see that the company has grouped its overheads into 5 cost items, as below: ? Machine-related expenses ? Setup labor cost ? Receiving and production control ? Engineering ? Packaging and shipment Current Method - Volume Based Costing As per the given information, Wilkerson uses volume based costing system. Direct material and labor costs are based standard prices. Overheads are charged as 300% of the direct labor cost. This implies overheads are applied directly in relation to labor costs irrespective of
Drakensberg Limited Case Report. The main problems are whether to launch a new product and how to treat the residual money with the target of maximizing shareholders profit. This report will use four steps to analyze and solve the question.
Drakensberg Limited Case Report Table of Contents Drakensberg Limited Case Report I Table of Contents II Introduction 3 . Current market position analysis 4 ) SWOT analysis 4 2) Product analysis 7 3) BusinessStrategy 8 2. Product Activity Analysis 9 ) Basic definition 9 2) Analysis with the two existing products 10 3) Analysis of three products including Dankie 14 4) Adjustment to the optimal output point 17 5) Summary 18 3. Investment activity analysis 19 ) Company Situation 19 2) Financial Data Analysis 19 3) Summary 23 4. Conclusion 24 Reference list 25 Appendix 26 . Estimation of fixed cost 26 2. Analysis of two existing products 26 3. Analysis of three products including Dankie 28 4. Calculation of the adjusted optimal point 30 5. Task allocation 31 Introduction Drakensberg Limited is a specialist manufacturing corporation that operates in high cost and tightly regulated economy. The company has encountered a series of problems facing the severe competition in this industry. The main problems are whether to launch a new product and how to treat the residual money with the target of maximizing shareholders' profit. This report will use four steps to analyze and solve the question. The first step is to give an insight into the current market position. In this part, SWOT analysis and product life cycle is the main focus. The second step is to
Case study Pedro Nuts! The use of absorption costing has allowed Knock to explain to Pedro the full costing's of the production of his peanut venture and resulted in him estimating a selling price which includes a sufficient margin of profit
Pedro : "Nuts!" PART A In order to build up a selling price of a product, it is important that costs are communicated in the best way possible; this can be easily done by effectively making use of management accountant's role whereby they are able to distinguish what costs are used for a product through cost classification and assigning them to cost objects. Product costs are described by Drury as cost which are "associated with goods purchases or produced for resale", this is shown in the case of Pedro as the manufacturing costs of the peanuts that he is selling. In terms of costs assigned to cost object, it is clear that indirect costing has been used which are described as costs which cannot specifically be involved with a product. According to the extract we can identify that fixed production overheads include the rent of the restaurant, heating and lighting, weekly cleaning and wages of the cook and waitress. In relation to the extract it is clear that Hugh Knock has based his thinking on the costing procedure known as absorption costing. CIMA (2005) has defined Absorption costing as "as cost accounting method which assigns direct costs or a proportionate part of overheads to cost units by use of one or more absorption rate". Within absorption costing there are four techniques which you are required to undertake, these are to identify indirect cost, absorb the
Explain why listed companies produce financial statements for external users and how these are regulated in the UK. - `The International Convergence Project is considered to be absolutely necessary in this age of globalisation. Discuss.
Assignment Feedback Form Student Name Last name First Name Student ID Code QM E-Mail Module Details Module Code Module Title Assignment Type (i.e. Journal Review/Essay) Marker(s) (Initials) Provisional Mark(s) Late (days) Penalty Marks Deducted Overall Mark Feedback Excellent Good Adequate Poor Very Poor Answers the Question and /or Develops an Argument Structure Theoretical and/or Factual Clarity Analytical Content Literature and Use of Sources Appropriate Referencing QUESTION A - Explain why listed companies produce financial statements for external users and how these are regulated in the UK. - `The International Convergence Project is considered to be absolutely necessary in this age of globalisation´. Discuss. The financial statement of a particular business basically contains the accounting information prepared mainly for users external to the company. Several groups known as user groups are interested in accounting financial information relating to a business. Mainly they are outside the business, however they are likely to be stakeholders and that it is why the need the financial statements so as to make investment decisions. Owners, managers, lenders, suppliers, customers, investment
Ideological Cement for the Global Economic Order - A Gramscian Analysis of the Third Way
Ideological Cement for the Global Economic Order - A Gramscian Analysis of the Third Way This discussion on Third Way politics takes as self-evident the two primary functions of the modern state within capitalist society: (1) that it acts as the central body for administering the affairs and representing the interests of those groups who hold sway over the major means of economic production in society, and (2) apart from exceptional circumstances it functions to exclude, as far as possible, the masses from any form of political participation that may disturb this function. Following these principles it is possible to employ a conceptual framework derived from knowledge of the capitalist state's basic social role which allows us to plot a predictable pattern of action that it will undertake in order to maintain authority, address crises, and secure the public's ideal position of passivity. If we can understand the basic logic the state will follow when faced with certain challenges and crises, usually taking the form of the public venturing too far into the realms of power and attempting to exert too great an influence on the economic and political forces which constitute their lived reality, it is also possible to go some way in predicting future paths of reaction the state may pursue in order to circumvent challenges to its legitimacy or interests. If we can expose and
Is beta death
Is Beta death? Contents Introduction P. 3 Literature review P. 4 - 6 Historical P. 4 Uses of CAPM P. 4 - 5 Strengths and Weaknesses P. 5 - 6 Weaknesses P. 5 - 6 Strengths P. 6 Discussion P. 6 - 7 Alternatives to CAPM P. 7 Conclusion P. 8 Problems with Fama French P. 8 The CAPM P. 8 Appendices P. 9 References P. 10- 11 Bibliography P. 12- 13 Introduction The Capital Asset Pricing Model (CAPM) was developed on the foundations of Markowitz (1952). Markowitz found that when two risky assets (measured through standard deviation) are combined, their standard deviations are not simply added providing the returns are not perfectly positively correlated. His studies can be used to generate an efficient frontier of portfolios; investors are now able to select a portfolio, which is most appropriate for them from the efficient set of portfolios. "Sharpe (1964) developed a computationally efficient method, the single index model, where the return on an individual security is related to the return on a common index"(Galagedera, 2007, p821). "The CAPM is a theory originally devised by Sharpe (1964) to explain how the capital market sets share prices"(Neale, 2003, p332). Under the CAPM it is thought to be illogical for investors to have a portfolio that isn't fully diversified. The CAPM assumes, as does the portfolio theory that such portfolios eradicate any company
Accounting has being blamed for the losses suffered by investors as a result of Enrons collapse, as it is generally seen that the accounting process as at Enron were misleading and inaccurate.
Accounting for Enron Since the Enron scandal was made public in 2001, which lead to its end in December of that year, much has been written on the matter of creative accounting, earnings management, financial transparency and fraud, and much more is likely to come as the investigation into Enron continues. This essay discusses the reason for Enron's accounting practices and the effect it has had on investors, accounting practices and accounting standards in this area. Accounting has being blamed for the losses suffered by investors as a result of Enron's collapse, as it is generally seen that the accounting process as at Enron were misleading and inaccurate. Whilst this is true to a point, it is important to note that accounting masked the losses made, but the business Enron did led to the losses themselves. The US standards set for financial reporting have been strongly criticised for their lack of 'substance over form' since the recent scandals (Baker and Hayes, 2004, p.2) and therefore were seen not to be showing investors the most accurate view of Enron's business and financial health. Baker and Hayes (2004, p.3) bring up the US Financial Accounting Standards Board suggestion that financial information should 'represent what it is intended to represent'. This statement can be easily manipulated by accountants and auditors by allowing them to show their accounts how
accounting issue
Identify and discuss issues relevant to today's professional financial accountant Financial reporting is one of the primary duties of a financial accountant. By maintaining the integrity of the components of a financial statement, he can earn the trust of the investors and ensure that the company's assets are invested appropriately. But to maintain the reliability of the financial statements is not an easy job as the method to produce financial reports are always changing. Accounting has always been a reactive service, changing and developing to meet the practical needs created by the environment in which it operates. Therefore, a financial accountant is always required to be skeptical and maintain a proactive approach when analyzing financial statements. A statement depicting a profit figure was always welcomed by investors until the Enron and WorldCom scandal. These scams highlight the issue that accounting numbers are acquiescent. And they are getting squishier as the use of estimates in the company account increases. This vulnerability of accounting figures puts investors' capital at risk by misleading them to unprofitable investment ventures. Due to rapid changes in business operations accounting has shifted from simple tallying of cash transactions to "accrual accounting", where profits and expenses are recorded when incurred and forward-looking estimates are playing
Boston Community Bank
Introduction The paper Boston Community Bank: BPM Assurance Services defines assurance services, describes various assurance services performed by CPAs, defines business performance measurement assurance service, gives an overview of the strategic objectives of Boston Community Bank, does a SWOT analysis for Boston Community Bank, mentions the executive performance measures of Boston Community Bank and provides future recommendations about the functioning of the Bank. Assurance Services Assurance services are a class of services provided by certified public accountants (CPA's) in public practice. The American Institute of Certified Public Accountants (AICPA) Special Committee on Assurance Services defines assurance services as "independent professional services that improve the quality of information, or its context, for decision-makers."(Elliott & Pallais, 1997, p.56-63). Decision makers are the users of the information and immediate beneficiaries of the assurance service. The decision makers could be internal to an entity, such as the board of directors or employees, or external to an entity, such as trading partners, creditors or customers. (Elliott & Pallais, 1997, p.56-63). The main goal of an assurance service is to improve the "quality of information" (Elliott & Pallais, 1997, p.56-63) so that the decision makers can make more informed, and presumably better,
As the management accountant of a local NHS hospital this report has been written for the senior management to help identify, explore and analyse some of the issues raised by Gordon Brown in comments surrounding poor management within the NHS. The
Introduction As the management accountant of a local NHS hospital this report has been written for the senior management to help identify, explore and analyse some of the issues raised by Gordon Brown in comments surrounding 'poor management' within the NHS. These comments were made in response to the varying range of costs involved in various procedures within the NHS. This report will begin by analysing the costing methods employed and giving a breakdown of the method. Costing is vital to the success of any organisation and the NHS is no exception. Costing allows us to budget, compare and contrast which allow us to benchmark and measure efficiency. The report will then move on to tackle possible causes for the variation in costs and finally look to offer some possible improvements based on the report's findings. Terms of Reference Below are some terms that will appear throughout the report: Direct costs - These are in relation to any cost that has a direct link with a procedure e.g. a specific piece of equipment, direct labour (heart surgeon, neurological surgeon) etc. Indirect costs - These are costs which cannot be directly assigned to one procedure e.g. indirect labour (nurses, admin staff etc.), Utility bills (Heating, electric, water), maintenance etc. Cost drivers- The activity that drives the cost to be incurred. Costing in the NHS "Healthcare systems