AFM102March22011

AFM102March22011 - Introduction to Management Accounting...

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Click to edit Master subtitle style 5/11/11 © Anthony Atkinson Introduction to Management Accounting March 2, 2011 Pricing and Product Planning 11
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5/11/11 © Anthony Atkinson Key Concepts in Today’s Class Opportunity costs Allocating productive capacity in the short run 22
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5/11/11 © Anthony Atkinson Resource Allocation In the short run allocate available capacity to maximize contribution margin Steps Compute the contribution margin for each product Divide the contribution margin for each product by the number of units of the scarce resource it uses to get the 33
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5/11/11 © Anthony Atkinson 44
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5/11/11 © Anthony Atkinson 6-20 55
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5/11/11 © Anthony Atkinson 66
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5/11/11 © Anthony Atkinson 77 6-21 Regular Deluxe Sale price per sq. yard $16 $25 Variable costs per sq. yard 10 15 Contribution margin per sq. yard $6 $10 DLH required per sq. yard 0.15 0.20 Contribution margin per DLH $40 a $50 b a $6 ÷ 0.15 = $40 b $10 ÷ 0.20 = $50 Because deluxe grade has a higher contribution margin per unit of scarce resource
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This note was uploaded on 05/11/2011 for the course AFM 102 taught by Professor R.ducharme during the Spring '09 term at Waterloo.

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AFM102March22011 - Introduction to Management Accounting...

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