Guard Your Investments- Corporate Defaults Alarm.pdf
Cost & Management Accounting Techniques for Effective Decision Making
1. Cost & Management Accounting Techniques Must for Effective Decision Making BY: A AMIR INSTITUTE OF COST & MANAGEMENT ACCOUNTANTS OF PAKISTAN
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8. The Make or Buy Decision 20,000 × $9 per unit = $180,000
9. The Make or Buy Decision The special equipment has no resale value and is a sunk cost.
10. The Make or Buy Decision Not avoidable; irrelevant. If the product is dropped, it will be reallocated to other products.
11. The Make or Buy Decision Should we make or buy part 4A?
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14. Impact of JIT Inventory Methods In a JIT inventory system . . . Production tends to equal sales . . . So, the difference between variable and absorption income tends to disappear.
17. Qunatity Discounts Avoid Disturbance Reduce number of ordering / setup Hedge against inflation Meet Unexpected Demands Quantity Discounts When to order How much to order Buffer Stock Maximum Inventory How often to review stock E O Q R O P
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19. Budgeting Define goal and objectives Uncover potential bottlenecks Coordinate activities Communicating plans Think about and plan for the future Means of allocating resources
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23. CVP Graph Units Dollars Fixed expenses Total Expenses Total Sales
24. CVP Graph Units Dollars Profit Area Loss Area Break-even point
25. Equation Method Profits = Sales – (Variable expenses + Fixed expenses) Sales = Variable expenses + Fixed expenses + Profits OR At the break-even point profits equal zero.