BU247 Chapter Notes - Chapter 3: Cost Driver, Target Costing, Variable Cost
Document Summary
Product planning: companies used target costing to focus efforts in product process and design that has good pro t potential. Budgeting: is a management accounting tool that projects of forecasts costs for various levels of production and sales activity. Performance evaluation: managers compare actual results with the budget period with expectations that were in the budget to assess how well the organization did in light of expectations. Contracting: in cost reimbursement, contracts organizations are reimburses their cost plus an increment for the goods and services they provide under contract, government are frequent large scale users because the potential for cost manipulation. Ie for a rocking chair cost drivers may include, labour, supplies, wood: to calculate variable cost per unit add all variable cost per unit together and then multiply by number of units. Example: suppose our furniture company has to pay a marginal tax rate of 30%.
