Determine and clarify the logistics cost. Logistics cost Logistics cost usually differently defined by different company. But, in general logistic is defined as the process of the management of goods that across all over the countries and also across the world. The company create a good path of their goods into supply chain or transport path which the use repeatedly to get a goods shipped to customers. Transportation cost Transportation cost is known as all the expenditure that involved in the movement of product, assets or something that needs the changes of one point to a different place that commonly passed to the customers.
Regression analysis, a statistical analysis technique used by economists and business researchers, helps managers and business owners forecast future conditions, lend quantitative support to managers' judgement, point out flaws in management thinking and provide new insights that can help company decision makers move their businesses toward a more profitable future. And it is also more accurate than high low method. Disadvantages: It is more costly and more time consuming. Because it needs thorough analysis and it uses all points of observation to estimate cost
Wilkerson is currently using the traditional costing system. “Companies that use the traditional costing method assume that the volume metric is the underlying driver of manufacturing overhead cost.” Traditional product costing was established when direct material costs and direct labor costs accounted for the bulk of product costs incurred inside a firm. In the Wilkerson company, materials and labor costs are centered around the prices of materials and labor rates. The two factors that demonstrate that the traditional system may produce estimates that are different than that of the unit cost are high overheads and indirect cost
“CM = Selling Price - Variable Costs”. It can be considered as either unit contribution margin or total contribution margin. Contribution margin is the profit available to cover fixed costs & produce net income to the owners. The contribution margin can also be viewed as a percentage or ratio. To compute the contribution margin ratio, divide CM by the Selling Price.
As work is performed and measured against the baseline the corresponding budget value is “earned”, consequently Earned Value metric cost and schedule variances can be determined and analyzed, from these basic variance measurements the project manager can identify significant drivers forecast, future cost and schedule performance and construct corrective action plans to get the project back on track. Earned Value Management therefore encompasses both performance measurement (i.e. what is the program status) and performance management (i.e. what we can do about it). Earned Value
Business Report Break-Even Charts Common Assessment Task A break-even chart is an infographic representing the costs at multiple levels of business activity. Its purpose is to categorise and summarise the different types of costs. The information required in order to produce a break even chart are the fixed costs which are costs that are independent on the output produced, total costs which are costs that vary depending on product, variable costs, added to the fixed costs and the revenue is the total income by the sales of the particular product. The break-even is able to be calculated through the chart or through the formula of Break-Even. Break Even Point: Fixed Costs/(Selling Price of the Product - Variable
Accordingly, while preparing the Common Size income statement, total sales is taken as a common base and other items are expressed as a percentage of sales. Like this, in order to prepare the Common Size Balance Sheet, the total assets or total liabilities are taken as a common base and all other items are expressed as a percentage of total assets and
Increased competition 3.1.4 Supplier Management Suppliers are major contributors in the effective functioning of supply chain operations. They can contribute through the timely and quality deliveries of goods and services. Therefore, it is essential that a purchase manger should work with suppliers to coordinate their operations and customer needs. i. Aspects of Supplier Management There are various aspects of supplier management such as vendor analysis, supplier audits, supplier certification and supplier partnering.
Materials price variance and materials quantity variance for direct material variance analysis and labor rate variance and labor efficiency variance for the direct labor variance analysis The total variance for direct materials is found by contrasting actual direct material cost to standard direct material cost, while the overall variance for direct labor variances analysis is established by comparing actual direct labor cost to standard direct labor cost. Standard costs are utilized in generating the flexible budget for both direct material and direct labor. The variance in materials costs is divided into a materials price variance and a materials usage variance, while the variance between the actual direct labor costs and the standard direct labor costs is divided into a labor rate variance and a labor efficiency variance. If the actual cost of both variance analysis is less than the expected cost that means the variance is favorable and vice versa. The direct materials variance analysis answers the question of whether the organization spends more or less amount on material and direct material in production than expected.
The key stages in activity based budgeting are to: Identify the organisation 's activities; Determine the cost drivers; Spread departmental costs to costs drivers; Calculate budgeted activity levels. The potential advantages of the activity based model are that: It identifies the cost of activities; It allows for resource allocation at different activity levels; It establishes a link between decision making and cost behaviour; It fits in with control systems.