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- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/07%3A_Budgeting/7.11%3A_Capital_Expenditure_BudgetA capital expenditure budget is a list of fixed assets that a company plans to acquire over a future period of time. These assets may be purchased to replace existing assets that are aging or outdated...A capital expenditure budget is a list of fixed assets that a company plans to acquire over a future period of time. These assets may be purchased to replace existing assets that are aging or outdated, or they may be additionalresources necessary to meet growing demand. Keep in mind that they are projections of what will take place in the future rather than reports of past performance.
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/04%3A_Activity-Based_Costing/4.05%3A_Differences_based_on_factory_overhead_methodAlthough the total factory overhead applied, $54,600, is the same for all three methods, how it is allocated between the two jobs varies by method, as follows: The results of the other two methods in ...Although the total factory overhead applied, $54,600, is the same for all three methods, how it is allocated between the two jobs varies by method, as follows: The results of the other two methods in the sample problem would overstate the amount of factory overhead that is applied to Job 1 and understate the amount for Job 2.
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/03%3A_Process_CostingThumbnail: Image by Pexels from Pixabay
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/05%3A_Cost_Volume_Profit_Analysis/5.05%3A_Margin_of_safetyThe margin of safety looks at how far above the breakeven point a company’s sales are. The greater the difference, the more secure a company can feel about hedging against possible declines in sales. ...The margin of safety looks at how far above the breakeven point a company’s sales are. The greater the difference, the more secure a company can feel about hedging against possible declines in sales. The margin of safety can be expressed as a dollar amount, a percentage, or a number of units. The margin of safety is 70%, which gives the company a significant cushion over its breakeven point. The higher the margin of safety, and the more it exceeds the breakeven point, the better.
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/zz%3A_Back_Matter
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/05%3A_Cost_Volume_Profit_Analysis/5.04%3A_Operating_leverageOperating leverage results are used to determine the effect on a change in sales on operating income. The percent increase (decrease) in sales is multiplied by the operating leverage to find the perce...Operating leverage results are used to determine the effect on a change in sales on operating income. The percent increase (decrease) in sales is multiplied by the operating leverage to find the percent increase (decrease) in operating income. The higher the operating leverage, the more impact a change in sales will have on operating income. An increase of 20%, or $100,000, to $600,000 in sales would affect each of the two companies’ operating income as follows.
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/09%3A_Differential_Analysis/9.04%3A_Lease_or_Sell_EquipmentThe company may choose to sell the asset or lease it to another company to generate an income stream. At the end of the lease period, the company could return the equipment to its manufacturer for $10...The company may choose to sell the asset or lease it to another company to generate an income stream. At the end of the lease period, the company could return the equipment to its manufacturer for $100 for scrap. The income from the four-year lease plus the scrap value is compared to the selling price minus the commission. Since selling the equipment will result in a $100 greater return, the company should sell the equipment.
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/04%3A_Activity-Based_Costing/4.02%3A_Single_factory_rate_to_estimate_factory_overheadThe factory overhead rate is $182 per direct labor hour, determined as follows. If 300 direct labor hours are used for the two jobs as follows, total estimated factory overhead is $54,600. The journal...The factory overhead rate is $182 per direct labor hour, determined as follows. If 300 direct labor hours are used for the two jobs as follows, total estimated factory overhead is $54,600. The journal entry to apply factory overhead of $54,600 to the jobs is as follows: Rather than direct labor hours, machine hours, percentage of direct labor, or other relevant activity base could be used to estimate factory overhead.
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/04%3A_Activity-Based_Costing/4.04%3A_Activity-based_costing_for_a_manufacturing_business_to_estimate_factory_overheadThe single factory overhead rate is a very loose estimate because it relies on one fixed dollar amount to assign factory overhead costs across the many facets, various segments, and different activiti...The single factory overhead rate is a very loose estimate because it relies on one fixed dollar amount to assign factory overhead costs across the many facets, various segments, and different activities involved in the manufacturing process. A factory overhead rate for each routinely-performed activity is calculated by dividing the total budgeted cost amount for the activity for a period by the budgeted activity base quantity over the same time frame.
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/04%3A_Activity-Based_Costing/4.03%3A_Departmental_rates_to_estimate_factory_overheadThe department factory overhead rate is $155 per direct labor hour in the Cutting Department and $236 per direct labor hour in the Assembly Department, determined as follows. Although the total factor...The department factory overhead rate is $155 per direct labor hour in the Cutting Department and $236 per direct labor hour in the Assembly Department, determined as follows. Although the total factory overhead applied, $54,600, is the same under both methods, the amount allocated to each job differs, as follows: Using departmental rates is more job-specific and therefore results in a more precise allocation of factory overhead to the jobs than the single rate.
- https://biz.libretexts.org/Bookshelves/Accounting/Principles_of_Managerial_Accounting_(Jonick)/03%3A_Process_Costing/3.02%3A_Process_Costing_Transactions_for_a_Manufacturing_CompanyWe will make two assumptions: (1) All materials that are needed to work on a batch of items in a department are added when the batch is started; (2) When a batch is started in the department, it will ...We will make two assumptions: (1) All materials that are needed to work on a batch of items in a department are added when the batch is started; (2) When a batch is started in the department, it will either be completed in the same month or completed in the following month. If you are the manager of the Packaging Department, your responsibility is limited to tracking the costs of the units in your department, but not in any of the other departments.
