Q1. and Solution (to illustrate how idle costs and long-run fixed costs remain unallocated in good-form Activity Based Profitability
Oracle Claim services processes insurance claims for hospitals. Two types of claims are processed, Medicare an
ACTIVITY BASED COSTING (ABC) - BRIEF NOTES
Prof. Ajay Maindiratta
Short-run: a time frame wherein some activity resources that are variable in consumption are nevertheless fixed in terms
of availability (capacity) and cost (because of commitments). Exampl
MoTown Auto Production Company -2
(Numbers have been scaled to maintain confidentiality)
MoTown Automobile Production Company (MAP) assembles and sells a full range of cars in an emerging economy compacts, midsize and
luxury models. Henry Hillberry, presi
This spreadsheet supports STUDENT analysis of the
case, "TSE International Corporation" (UVA-F-1366).
Revised, January 18, 2005.
Copyright 2001 by the Trustees of the University of Virginia Darden School Foundation.
Alpha Company contd
Computing Incremental Cash Flow and Cost-of-Capital: important observations
A. A firm accesses two broad sources of Capital: Debt and Equity
In doing the analysis, one may proceed in one of two ways:
1. Compute incremental cash flow to
The Multi-period (Capital Budgeting) Decision
Example: Alpha Company sells grandfather clocks. It buys the basic clock mechanism from a supplier and installs it in
wooden housing made in the companys factory on equipment that it bought five years ago for
Q1 and Q2 are for practice (solutions are attached). Q3 is for submission (solution will be discussed in class)
Usual Assumption: When you are not told if some line item which could potentially be either cash or accrual is actually which, such as for