Absorption and Variable Costing Essays

Absorption and Variable Costing Essays Absorption and Variable Costing Paper Absorption and Variable Costing Paper CHAPTER 8 ABSORPTION AND VARIABLE COSTING Learning Objectives 1. Explain the accounting treatment of fixed manufacturing overhead under absorption and variable costing. 2. Prepare an income statement under absorption costing. 3. Prepare an income statement under variable costing. 4. Reconcile reported income under absorption and variable costing. 5. Explain the implications of absorption and variable costing for cost-volume-profit analysis. 6. Evaluate absorption and variable costing. 7. Explain the rationale behind throughput costing. . Prepare an income statement under throughput costing. Chapter Overview I. Product Cost and Fixed Manufacturing Overhead A. Absorption-costing income statements B. Variable-costing income statements II. Reconciliation of Absorption- and Variable-Costing Income A. No change in inventory levels B. Increase in inventory levels C. Decrease in inventory levels III. Overall Evaluation of Absorption and Variable Costing IV. Throughput Costing Key Lecture Con cepts 1. PRODUCT COST AND FIXED MANUFACTURING OVERHEAD Product, or manufacturing, costs are comprised of direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead. The basic difference between absorption and variable costing is the treatment of fixed manufacturing overhead. * With absorption (full) costing, all costs related to the manufacture of a good are product costs. Therefore, fixed manufacturing overhead attaches to the units being made and is carried in inventory until the product is sold. * Absorption costing results in the preparation of a traditional income statement. Absorption costing is considered GAAP and is acceptable for tax reporting. * Under variable costing, product cost is comprised solely of variable manufacturing costs. Fixed manufacturing overhead is viewed as a cost of being ready to produce, not an actual production cost (i. e. , the cost will remain constant no matter how many units are manufactured). * Fixed manufac turing overhead is treated as a period cost and expensed immediately. * The income statement highlights cost behavior and is presented in a contribution margin format. Variable costing is useful to managers, as it dovetails nicely with cost-volume-profit analysis. 2. RECONCILIATION OF ABSORPTION- AND VARIABLE-COSTING INCOME * The difference between the two approaches is the timing of when fixed manufacturing overhead is shown on the income statement: when the product is sold under absorption costing and when incurred under variable costing. * The two methods will usually produce different income figures. * No change in inventory: production = sales * Under variable costing, all fixed manufacturing overhead is expensed. With absorption costing, the periods fixed overhead flows through to cost of goods sold. * Absorption-costing net income equals variable-costing net income. * Increase in inventory: production ; sales * Under variable costing, all fixed manufacturing overhead is expensed. With absorption costing, a portion of the periods fixed overhead flows through to cost of goods sold and a portion remains on the balance sheet in inventory. * Absorption-costing net income is greater than variable-costing net income. * Decrease in inventory: sales production Under variable costing, all fixed manufacturing overhead is expensed. With absorption costing, as units manufactured in a prior period are sold, an amount greater than the current periods fixed overhead flows through to cost of goods sold. * Absorption-costing net income is less than variable-costing net income. * The difference between absorption- and variable-costing income figures can be reconciled as follows: Income difference = Inventory change in units x Fixed overhead per unit The difference is likely to be very small over a lengthy time period. . OVERALL EVALUATION OF ABSORPTION AND VARIABLE COSTING * Pricing decisions * Absorption-cost proponents argue that fixed manufacturing overhead is a necessary production cost. Excluding this element from the inventoried cost of a product will understate the goods cost, which is troublesome for companies that use cost-based pricing techniques. * Variable-cost proponents argue that variable cost is better for pricing decisions. Any price above a goods variable cost results in a positive contribution margin for the company. Many firms use variable costing for internal-reporting purposes. Given that absorption costing must be employed for external financial reporting, companies can use both methods by making several simple end-of-period adjustments. 1 If a company operates in a just-in-time environment, inventories are kept very low and there will be little change in inventor y from period to period. Thus, the income differences between absorption and variable costing will normally be insignificant. 4. THROUGHPUT COSTING Throughput costing assigns only the unit-level spending for direct costs as the cost of products or services. * A unit-level cost is incurred every time that a unit of product is manufactured. * All costs other than the throughput cost are considered to be operating expenses of the period. * Proponents of throughput costing argue that this procedure eliminates the incentive to produce excess inventory because all non-throughput costs are expensed regardless of manufacturing volume.

When To Use Time Sensitive Salutations [Etiquette Mistakes]

When To Use Time Sensitive Salutations [Etiquette Mistakes] Two participants in our Effective Business Writing courserecentlyquestioned why using â€Å"Good Evening† was not best practice for an email salutation. We always want to engage our reader, and shape any document, including email, from our reader’s perspective, not our perspective. With email, when the recipient is likely to read the email is more relevant than when we send it. Good Evening Email Etiquette For example, if you work in London and send an email off at 9:00 P.M. to a colleague or customer in Los Angeles, the recipient would receive it 1:00 P.M. Los Angeles time. If the first words your recipient reads are â€Å"Good Evening† while he or she sees the sun shining and is midway through the work day, it fosters reader disconnect. If you do not know when your reader is going to read your email message, choose a time-neutral salutation: Dear, Hello, Hi – choosing whichever best matches the relationship and purpose of your email. (More on appropriatebusiness email salutions.) Using the salutation â€Å"Good Morning† can be particularly warm and engaging, if you are certain your reader will receive your message in the morning. For example, you have a phone conversation with your reader in the morning (reader time zone), and promise to email a document right after you conclude the call. In this case, â€Å"Good Morning† is a great salutation because it enhances the connection because it is immediate and warm and reader-focused. This same thought process should apply to description of your activities. My friend, based in Seattle, recently shared that she was momentarily concerned when her colleague, based in Glasgow, sent an email to her that began â€Å"I’m savoring a single malt and reading your proposal†¦Ã¢â‚¬  It was 6:00 P.M. in Glasgow, so a single malt was well deserved and in order, but it was a little jarring at first read for my friend in Seattle, who was sipping morning coffee at 10:00 A.M. Of course, any reader will understand with brief reflection, but we don’t want to require reflection or questioning. We want to engage our readers right away. Reader-focused writing requires that we keep content, organization and tone on our reader, not on our own thoughts. Good Night Use â€Å"Good Morning† and â€Å"Good Night† with care – they are engaging when you know your reader will read them at the right time, but will wedge an intimation of lack of awareness for your reader if you miss the time mark. Master Business Email in ThisEmail Course

US Government Interest Groups Research Paper Example | Topics and Well Written Essays - 1500 words

US Government Interest Groups - Research Paper Example Economic interest groups safeguard some sort economic merit for their members and are the most common kind of special interest groups. In capitalist societies like America, money occupies a central position, and thus economic groups are many and very influential. Economic groups are well financed as members are willing to part with money with the hope of garnering greater political benefit. Economic groups operate to attain private goods where only members of the group will enjoy (Paddock, 2005). Â  Business groups seek to influence the government on policies regarding the economy and business. For instance, the National Manufacturers Association operates to limit the government regulation in the manufacturing industry in America (Miller, nd). Â  A labor group represents unions that operate to enhance the wages and promote favorable working conditions for skilled, semi-skilled and unskilled employees. AFL-CIO is one of the biggest labor groups in America. Â  An agricultural group represents the interests of farmers and farm businesses. The National Farmers’ Union is the interest group that represents small-scale farmers while American Farm Bureau Federation represents the interests of large-scale farmers. Â  These are official groups that formulate ground rules for a certain profession, monitor practices, and foster standards of conduct. For instance, American Psychological Association safeguards regulate and foster the rights of psychologists. Â  This group plays an enormous task in governing drugs prescription, influencing drug authorization, as well as monitoring the price and disbursement of pharmaceuticals. An example of Interest groups and prescription drugs is the Food and Drug Administration. Â  

Chinese people and Classical Music Essay Example | Topics and Well Written Essays - 1000 words

Chinese people and Classical Music - Essay Example Music is one of the most fundamental elements of the culture and reflects the various trends which are typical of a nation. And when it comes to China that is for sure one of the oldest civilizations of the world, carrying out research in this area seems even more reasonable because of the fact that China is viewed as the pioneer in the fields of music, sculpture, art and poetry, and the Chinese have introduced divergent forms of music in the history specially during the Zhou and Han regimes, which won applause and popularity in different areas of the world. Having said this, the significance of the topic can easily be estimated. This is principally a qualitative research. The methodology was based on such research tools as interviews, desk study and brainstorming. As you can see on the poster, I started my research on the association of the youth of China with the Classical music of the past in two ways. First, I started to study and analyze the research conducted by various scholar s in the past in the same area. I believe it is always a good idea to refer to the history of literature about the areas of knowledge you want to explore. For this purpose, I tried my best to work out all related researches from the past and somehow, I managed to lay my hands on quite a lot of the required stuff.

Childhood Memories of Dad :: Personal Narrative

A memento is a reminder of the past, a keepsake. They come in many shapes and sizes. People save objects for many diverse reasons. In my case, I will forever keep and pass on my keepsake to my children because of the many good and bad memories it evokes from my childhood and about my father. It is a lime green 1976 KX250 dirt bike that my father had given to me as a child to restore and was exactly the same as the one he had bought as a teen. It is all black with a lime green gas tank that says Kawasaki and has two large knobby tires. It is one of the first race models that was produced for use on motocross dirt tracks and also the same as the first bike I would ever ride. The bike that would bring my father and I close together, and the bike that would make me love riding off road vehicles forever. I was only knee-high to a grasshopper when I first felt the wail of a two stroke engine underneath me. The noise that bike made was like a mother’s soft voice to a crying baby. I would usually just be sitting inside my grandparent’s house playing video games when I would here the loud purr of the motorcycle’s engine. I would light up with total excitement and usually run to the door to see if my Dad was going to take me for a ride. Most of the time I would end up in sheer joy, but occasionally, I would just get a feeling of disappointment. It’s the good times that I remember the best. I would put my worst clothes on because I knew I was going to get dirty. Then I would run outside to see my Dad putting his helmet on and revving the lime green bike up, while light blue smoke seeped from the exhaust pipe, which ran underneath the black engine. After I was done putting on the shiny new helmet and goggles that my Dad had bought me, he would pick me up and place me right in front of him, between him and the gas tank, so I could hold on to the crossbar on the handlebars. Then as he let the aluminum clutch lever out easy and gradually twisted the throttle, we would speed off around the gate and down the dirt road behind the house. Childhood Memories of Dad :: Personal Narrative A memento is a reminder of the past, a keepsake. They come in many shapes and sizes. People save objects for many diverse reasons. In my case, I will forever keep and pass on my keepsake to my children because of the many good and bad memories it evokes from my childhood and about my father. It is a lime green 1976 KX250 dirt bike that my father had given to me as a child to restore and was exactly the same as the one he had bought as a teen. It is all black with a lime green gas tank that says Kawasaki and has two large knobby tires. It is one of the first race models that was produced for use on motocross dirt tracks and also the same as the first bike I would ever ride. The bike that would bring my father and I close together, and the bike that would make me love riding off road vehicles forever. I was only knee-high to a grasshopper when I first felt the wail of a two stroke engine underneath me. The noise that bike made was like a mother’s soft voice to a crying baby. I would usually just be sitting inside my grandparent’s house playing video games when I would here the loud purr of the motorcycle’s engine. I would light up with total excitement and usually run to the door to see if my Dad was going to take me for a ride. Most of the time I would end up in sheer joy, but occasionally, I would just get a feeling of disappointment. It’s the good times that I remember the best. I would put my worst clothes on because I knew I was going to get dirty. Then I would run outside to see my Dad putting his helmet on and revving the lime green bike up, while light blue smoke seeped from the exhaust pipe, which ran underneath the black engine. After I was done putting on the shiny new helmet and goggles that my Dad had bought me, he would pick me up and place me right in front of him, between him and the gas tank, so I could hold on to the crossbar on the handlebars. Then as he let the aluminum clutch lever out easy and gradually twisted the throttle, we would speed off around the gate and down the dirt road behind the house.

Rawls Summary

Justice as Fairness Rawls first begins with discussing how we are lead to the original position. The original position is a hypothetical argument that considers a society where people do not decide what is right or wrong based on a higher power or emotion, but rather on common sense. These ideas establish justice or fairness simply based on the community’s beliefs that they create. However, these agreements cannot be made without the â€Å"veil of ignorance. † This means that all instances that would create a distortion of views must be ruled out.Thus, the people discussing what the rules will be cannot have any information about the other individual, or the society’s position. The hypothetical argument is contingent on all things being fair and equal, which means that all people involved in crating the beliefs must be free of any preconceived ideas. Another part of the equality of this situation is that every member of a society, including the minority, must be treated fairly. Rawls stated that every citizen had basic liberties and human rights that must be protected.He believed that societies need to protect the least advantaged citizen in order to be successful. We determine which citizens are least advantaged based on if they possess primary goods. Primary goods are what is needed to be a functioning and contributing member of society. These things are not necessarily monetary, but rather on psychological capabilities, historical facts, social capabilities, as well as, moral abilities being free and equal. Rawls believe that the five most important primary goods that determine advantage are basic rights and liberties, freedom to choose, responsibility, income and self respect.These things can make this hypothetical a reality and a society fair as equals. Let us begin with how we might be led to the original position and the reason for not using it. Now this agreement, like any other, must be entered into under certain conditions if it i s to be a valid agreement from the point of view of political justice. Contingent historical advantages and accidental influences from the past should not affect an agreement or principles that are to regulate the basic structure from the present into the future. Social and economic inequalities are to satisfy two conditions: first, they are to e attached to offices and positions open to all under conditions of fair equality to opportunity; and second, they are to be to the greatest benefit of the least-advantaged members of society. These revisions in the second principle are merely stylistic. To accomplish its aims, certain requirements must be imposed on the basic structure beyond those of the system of natural liberty. A list of basic liberties are drawn up in two ways. To answer these questions we introduce the idea of primary goods. Income and wealth, understood as the purpose of all means.

Franklin Delano Roosevelt Essay - 1685 Words

After taking this class and learning about leadership I think that there are many qualities to leadership. I believe an effective leader should demonstrate teamwork, integrity, compassion, respect, good communication skills, the ability to listen to others, have the ability to delegate, have confidence, initiative, a positive attitude, be creative, have self-discipline, be responsible, have courage, charisma, character, competence, passion, problem solving skills, and most of all, be teachable. These are all in addition to the traits we learned from Bennis which include having a vision, a distinctive voice, being adaptive, and having integrity. Some of the leadership qualities I think I have strengths in include: teamwork, delegation,†¦show more content†¦The development of my leadership can be attributed to my roles in group projects throughout school and also my job as a manager at Walgreens. I have learned that groups don’t always function properly and in certain instances there needs to be a push in the right direction for some members of the group. I try to lead the group by motivating other members and sometimes threatening them with a punishment because of their own lack of effort towards our common goal. My role as a manger at work has also shaped my leadership capacities by making me in charge of the store and the people working. When it comes to adversity I don’t think that I have faced much in my lifetime. Being compared to the adversity that other people have faced in their lives the things I have overcome are minor and not necessarily life changing events. One person that I admire is Laur en Conrad, who is a self made fashion designer with a great character and moral compass. She is from Hollywood but he is a good genuine person despite her surroundings and she is an inspiration to me other young women around the globe. Franklin Delano Roosevelt was the 32nd President of the United States and is arguably one of the greatest presidents and leaders in United States history. Franklin D. Roosevelt is the only American president to be elected to four terms and since then there has been an Amendment passed that says no person should serve more than twoShow MoreRelatedFranklin Delano Roosevelt Vs. Franklin Roosevelt1559 Words   |  7 PagesFranklin Delano Roosevelt was conceived on January 30, 1882, into an affluent gang. The Roosevelts had been unmistakable for a few eras, having made their fortune in land and exchange. Franklin was the main offspring of James Roosevelt and Sara Ann Delano Roosevelt. The family inhabited Springwood, their domain in the Hudson River Valley in New York State. While growing up, Franklin Roosevelt was encompassed by benefit and a feeling of pomposity. 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Serving as President for more than twelve years, he was the only President to be elected four times. Roosevelt led the United States through its worst depression and its worst war. He tried his best to stay optimistic with our country and the decisions he made. In Roosevelts first inaugural address, he asked for faith in Americas future. He told the country, The only thing we have to fearRead MoreThe Perception of Franklin Delano Roosevelt2719 Words   |  11 PagesPerception of Roosevelt During the 1920’s a series of events were set into motion that plunged America into one of the worst time of its existence come 1929 and later the Great Depression. Through the challenges America faced, it arose to become the world’s strongest leading economical and political superpower. As the country began to emerge stronger than ever, leaders arose to the occasion and aided its progression as a world power. One such leader was be Franklin Delano Roosevelt. 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