Absorption Case Studies Samples For Students

Ronald performance remained constant for the two periods. According to the absorption costing income statement the net income increased as shown in the excel spreadsheet. The net profit increased from $438,000 in the first quarter to $475,000 in the second quarter. This shows an 8.45% increase in net income as shown in the excel sheet. However, according to contribution margin income statement; the net income remained the same in both quarters. The profit levels for both periods remained at $250,000.The increase in profits in the second quarter under absorption income statement can be explained by changes ...

1. Explain the main differences between absorption and contribution income statements. Will net income always be the same under the two approaches? If not, explain the difference.

An absorption costing income statement is created for stakeholders apart from the company’s own employees and internal management. This method ensures that all overhead costs are included in the inventory of the company. In other words, all costs that are directly linked to manufacturing including; labor and material are added to the inventory. Consequently, the cost of manufacturing is transferred from the inventory costs to ...

Question 1

The difference in the operating income could be explained by the fixed cost element contained in cost of goods sold under absorption costing. The operating incomes of both methods can be reconciled by factoring in the fixed cost per unit of inventory multiplied by the changes in inventory.

Year 1

Operating income under absorption costing 27,500
Less fixed cost carried forward in closing stock (14*500) (7,000)
Operating income under variable costing 20,500
Year 2
Operating income under absorption costing 13,500
Add fixed cost carried down in opening stock (14*500) 7, ...

Introduction

The body is made up of various organ systems which perform various functions. One of this is the urinary system which is responsible for excretion of various metabolic wastes. An important organ in the urinary system is the kidney. In the kidney, blood undergoes ultra filtration; nutrients such as glucose are reabsorbed back while waste products such as urea and excess water form urine which is excreted. The kidney maintains electrolyte and water balance in the body. During sustained physical activity, the body looses a lot of water through sweating. This disrupts the electrolyte balance in the body and leads ...

- You are required to evaluate, the two options for the production of product Z.

Comment and advise Tony accordingly in the production of product Z.(25 marks)

Answer:
Assuming 40,000 production levels, the cost associated with both the options are as below:
It can be easily seen that the cost of producing 40,000 units is less in case of labor intensive option than the machinery option. For low production levels, it is recommended that labor intensive option is a better option.
However, as the production level goes up, machinery option covers up for the extra machine rental expense and at some level produces units at a lower cost ...

Marginal cost and absorption cost are two methods that are significant in the modern day manufacturing companies. Absorption costing method is necessary when financial statements of a given company are prepared for external purposes. One of the important principles in the absorption cost is that unit produced and inventory must involve a share of all production costs, both variable and fixed, incurred in acquiring them to the current situation. On the other hand, marginal costing method is applicable when making internal decisions. Since fixed costs are incurred in all levels of financial activities, the main purpose of this method is computing ...

Differences between managerial accounting and financial accounting

Financial accounting is mandatory since some external parties like tax authorities’ creditors and shareholders’ require such periodic statements, while managerial accounting, is not mandatory. Managerial accounting reports are prepared for use by managers while financial accounting reports are made for external parties. The former must be prepared according to the GAAP standards, while in managerial accounting some provisions are ignored. Though the two procedures use the same data, the relevance is different; financial accounting data are verifiable and objective and used when to solve situations at hand (Tulsian, 2002). On the other hand, managerial accounting data is flexible and ...

The revival of the Clayton Spa in Italy revolves around decisions to do with initial costs as well as welfare considerations for the long-serving employees. Additionally, the managers appear to be keen on long term profitability and not short-term considerations ("report on Clayton Industries case Peter Arnell, country manager for Italy"). Both decisions possess merits and demerits in varying measures and their success depend partly on the efficiency and partly on the due diligence of its execution. The ultimate decision by Peter Arnell will involve finding a balance between the two options he is exposed to and investing sparingly ...

Answer 1

The profit will be calculated by deducting total costs from price. To obtain the profit percentage for each of these products, profit will be divided by total costs and the answer will be multiplied by 100. For the full costing method, fixed and variable costs will be included (Hughes, 2012). These costs will include material costs and direct labor hours. For phones, the cost will be £ 90 + 2 * £ 8 = £ 106. For tablets, the cost will be £ 140 + 2.5 * £ 8 = £ 160. For computers, the costs will be £ 315 + 4 * £ 8 = £ 347. The profit margin for phones will be (£ 170.69 - £ ...

Stone Formation in the Kidney/ Role of Citrate in the Kidneys

Kidney stones are calcified or solidified molecules taking place in the upper urinary tract and the kidney. Kidney stones are usually composed of calcium as oxalate, phosphate, or carbonate. Stone formation in the kidney happens when the amount of mineral salts in the urine becomes saturated, during which the mineral will automatically crystallize (Rao et al., 2011). Stone formation is further facilitated by increasing amount of calcium in urine and dehydration. High levels of calcium in urine can indicate kidney disorder, prolonged incapacitation, hyperthyroidism or overactive thyroid, excessive intake of milk or aluminum and vitamin D. Stone formation in ...

Allocating Fixed costs

Fixed can be described as those costs the form or organization incurs whether or not it is producing any goods or services in the current period. In simple terms, costs that do not decrease or increase with change in production. They are only affected by structural changes or changes in the rate of inflation (BPP, 2013). Fixed costs are only variable in the long run but constant in the short run hence their name fixed costs. Allocation of cost can be said as the process of aggregating, identifying costs and allocating cost to cost entities. Hence, allocation of fixed ...

The Digestive Tract

Part I: Parts of the Digestive Tract/System
Part II
Section A
The Mouth
The digestive tract starts at the mouth. This is the first step of digestion. When one takes the first bite, food begins the digestion process through chewing. Chewing breaks down the food into more soluble pieces. This also increases the surface area for which the digestive enzymes can work on the food in the latter stages of the digestion process.

Oesophagus

The oesophagus is located in the throat near the windpipe (trachea). This is the second stage of the digestion process. This part ...

Wal-Mart

Strategy of Wal-Mart
Wal-Mart, one of the biggest world retailers, is the company that was founded in 1962. And from the very beginning, the strategy of Wal-Mart was to be a best discounted retailer that has lowest prices and is close to its customers. This strategy was performed through two main instruments – costs minimization and stores locations.
As for cost minimization, it is a core competitive advantage for Wal-Mart. In other words, it is nature and spirit of Wal-Mart. And this aim was indicated just from its foundation in 1962. But how Wal-Mart succeeded in cost minimization? Generally, it ...

John, a 50-year old man, visits a convenient care clinic complaining of fatigue, increased hunger, increased thirst, and frequent urination over the last two months. He also reports increased episodes of itching. Clinical examination reveals the presence of dark patches on his skin in the neck and armpit areas. Physical examination reveals a weight loss of 5kg over the last one month. Laboratory test show the following results: A1C= 7.1%, FPG= 127mg/dL and OGTT= 202mg/dL. John is single and currently stays alone. He has one sister whom he last met two years ago. He is also not employed currently.
...

6 pages n/b
As an EEC corporate business financial analyst, you must have an expert understanding of the various costing methods. Within your groups, divide the costing concepts among the individual team members to analyze and become an expert in at least 1 costing concept within your group. Then, write a paper to include the following:

• How the concept could be used by EEC
• When the concept could be used by EEC
• How the application of the concept differs from the other concepts
• Advantages and disadvantages of the concept as it relates to EEC
Choose ...

Challenges of Globalization upon Disneyland

The dynamics that define the constantly evolving global business space generate the challenge of remaining innovative and relevant for clients throughout the world, by juggling the genuine “real thing” of well-known brands with their cultural adaptation to local markets. Disneyland is at the crossroad between permanently reinventing itself by proposing new experiences for its diverse clients while focusing on providing the American original Disneyland experience through all its overseas locations. In this context, one major challenge that the company is likely to confront with in the future is based on the standardization/adaptation dilemma, as it will need to predict ...

Introduction

Question 1. how and why the incident happened (what conditions allowed the incident to happen)?
Hiroshima is located in the west of the largest Japanese island of Honshu. The town's name translates as "Wide Island". It is so named because the bayou Ota, flowing from the mountains to the plains Chugoku, where the Hiroshima formed at the confluence of the Inner Sea 6 islands protrude into Hiroshima Bay. They located the city. Hiroshima worth almost entirely in the valley, only slightly above sea level; to the north-west and north-east lie the hills, up to 700 feet (Rotter, ...

Community Health Nurse

Hypothyroidism is a clinical syndrome in which there is either deficiency or absence of thyroid hormone in the body. This manifests as a decrease in the metabolic rate in the body, which is seen as a slowing in physical and mental activity in the body. (Orlander, 2013)
Thyroid function is controlled by two other organs, the hypothalamus and the pituitary gland. A defect in function of any of these two organs can lead to hypothyroidism. Moreover, localized disease of the thyroid gland itself can also lead to hypothyroidism. Hypothyroidism is usually a primary pathology in which there is inability of the thyroid ...