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Identify whether each of the following transactions involves spot exchange, contract, or vertical integration. For the last item if the contract length is optimal or suboptimal.
a. Elasticities R Us, a local econometric forecasting firm, purchases office equipment from Staples.
b. Exxon-Mobil uses the oil extracted from its wells to produce raw polypropylene, a type of plastic.
c. Arcadia University contracts with Marriott for housekeeping services and has a legal obligation to purchase these services for the next 3 years.
d. Wavy Wall Construction - a homebuilding contractor - purchases drywall from the local Home Depot.
e. As a manager of the WeDoWell Corporation, you have negotiated with several vendors and are on the verge of signing an eight-year contract with Bolts Enterprises. Under the contract, they would ship to you 2,000 titanium bolts per month at a price of $1,000 per bolt. Your assistant has just brought you an article from a trade publication that indicates another company has developed a new technology that reduces the cost of producing the titanium bolts. How would this information affect the optimal length of your contract with Bolts Enterprises? Explain.
Budget Preparation The organization's budget is ready following the acceptance and sanction of the decision packages. Once the budget of organization has been accepted manager
useroffinancialstatement
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Problem Marginal costing plays a major role in making certain decisions. It provides information to management regarding the behaviour of costs and the incidence of such costs
Explain the main purpose of cost centre The main purpose of cost centre is two fields. 1. Recovery of cost: costs are collected, classified into two field in respect of
How costs behave as the level of activity/volume changes. Why an understanding of cost behaviour is important ? Types Variable e.g. petrol, direct materials Fixed e.g.
Decision-making is an integral part of all management functions. It is the process of choosing the among alternative courses of action. Managers have to
What is a pro forma financial statement and how does it relate to the master budget?
Case Study Labor standards Geeta & Company has experienced increased production costs. The primary area of concern identified by management is direct labor. The company is conside
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