Wednesday, August 24, 2016
Corporate governance is all about monitoring and controlling management decisions and strategies all to the best interest of the company’s stakeholders.
As a result of many companies going bankrupt in winding up despite producing a healthy financial statement, Codes for corporate governance were established, and companies were expected to comply with them
Tuesday, August 23, 2016
Throughput can be defined as the rate at which raw material were turned into sale
Throughput can be represented thus sales - total variable costs
Things you should know about Throughput;
1. Aside material, every other cost are considered fixed
2. Inventory is considered as investment and valued at the cost of its raw material.
3. Operating expenses include all costs incurred to produce the throughput, including that of labour.
4. Profit in throughput accounting is measured as throughput minus operating expenses.
Thursday, August 11, 2016
The last post explained to us the meaning of target costing, this post, will be illustrating target costing proper;
Mincol Plc. is planning on introducing a new product to the market. The management estimated the total cost of product at 50,000 units to be as follows;
Target costing is a management decision tool in costing a product to maximise profit. It is often considered a reverse of cost-plus pricing, whereby the starting point in deciding cost is by determining the target selling price of the product deducted by an agreed or standard profit margin. The point being a control measure to ensure that future cost will not be higher than the target cost.
Tuesday, August 09, 2016
Blogging is hard work, I have to say, but when you are blogging about the things you love and enjoy doing, then it becomes fun for you. I really miss been away from my blog for these past days; apologies I had to complete a job that took a lot of my time. Well am done with all that now.
Let’s look at briefly at Variance, its meaning and illustration
Variances are deviation from the Standard cost. They are the difference between the budgeted cost and actual cost.
Monday, August 01, 2016
Hello guys welcome to a new month, you might be wondering why am particular about this month, why not other months; well it’s my birth month and I want to recognise all the August born in the house!
We are kind of special you know.
Back to the matter, today we are going to look at Expected Value as a decision making tool in Risk and Uncertain scenario
First what is Risk, and Uncertainty?
Risk-is a situation where the future outcome a decision taken could be any of several possibilities.
Uncertainty-when the outcome of decision cannot be ascertained or quantified due to insufficient information, we refer to it as an uncertain situation.
Reducing uncertainty will require being able to source for more information.
We have various other techniques that we can use to evaluate various decision options by the nature of risk and return. They include;
Friday, July 29, 2016
Like we have established that the Preparation of an entity’s financial statement is governed by standards prescribed by the body responsible for standard setting in accounting profession; and that every entity is expected to comply with these standards when preparing their financial statements.
Today we are going to look at one of such standards that explains or give a guide on how to prepare a financial statement of a construction company, how to handle contracts in the accounts,
Wednesday, July 27, 2016
Substance over form is one of the concepts in Accounting that believes that all transactions and events should be accounted for and presented in accordance with their economic substance and financial reality, and not merely with their legal form.
Tuesday, July 26, 2016
It’s been awhile we did the question and answer thing. Well am bringing it back today, and it’s on management accounting.
Try it out; keep your answers ready as I will be posting the correct answers on the comment section soon.
I really encourage you to participate in theses exercise; you might not know where your examiner will decide to pick his questions from lol
1. The process of determining the price at which goods are transferred from one profit centre to another within the same company is
A. Mark-up pricing
B. Market pricing
C. Transfer pricing
D. Arm’s length pricing
E. Pro-rata pricing
Thursday, July 21, 2016
Hello guys it’s another beautiful day, here in Nigeria, the weather is great, very calm and breezy am loving it!
Yea so a quick run at what I have for you today, it’s quite a simple one, and here it goes;
Bonny Nigeria Limited has a total fixed cost of N7, 360,000. It produces and sells two products, A and B. You are given the following details: