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Mid term Concepts Review

Mid term Concepts Review - ALBERT’S WIZZERS Issue&...

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COMMERCE 354 Winter 2011 FESTIVUS: Issue Identification Build Alternative Analysis and Model Decision-making in a qualitative and quantitative environment Time dimensions Calculate relevant numbers: exclusions and inclusions “A QUICK REFRESHER” Use of High-low method to isolate VC and FC Understanding when and why the high-low method is utilized Separating production from sales Understanding break-even Opportunity costs and capacity constraints PICAZON What needs to be done to COGS? Why classify costs? Why does COGS need to be “adjusted”? Difference between contribution margin and gross margin Two Approaches to segregate costs Manufacturing and Non-manufacturing Fixed and Variable Why the inventory method chosen makes no difference. Financial impact of pricing discounts Issues (#,$$) surrounding “big orders” Albert’s Gadgets Constructing Alternatives Analyzing Overhead and the danger of allocating fixed overhead Opportunity costs and sunk costs
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Unformatted text preview: ALBERT’S WIZZERS Issue & decision identification Overhead allocation in a two product model Understanding and analyzing complexities when one product is an input to the other Sell or process further decisions COCIENTE Joint Costs: primary products and by-products Multi year decision-making Relevant costs and historical averages “Soft versus hard numbers” High Low method and batch costs One time versus ongoing costs/benefits TAMAHUY Manufacturing versus non manufacturing costs Inventory: Carrying costs as opportunity costs Production versus sales driven costs Analyzing Customers/Orders/ Inventory and their corresponding costs Special orders and their relevant costs INFLATIONARY IMPACT Understanding why inflation needs to be removed Understanding how inflation distorts cost models Ability to remove and re-insert inflation into a model Inflations impact on historical numbers “Re-inflating” for decision purposes...
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Mid term Concepts Review - ALBERT’S WIZZERS Issue&...

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