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Dynamic Costing

Dynamic Costing
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ISBN: 87-7681-151-4
1 edition
Pages : 125
Price: Free

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Summary

Use Dynamic Costing to Control Costs and Increase Profits. Dynamic Costing is an ebook to download free of charge.

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About the book

  1. Description
  2. Preface
  3. Content
  4. Embed

Description

Use Dynamic Costing to Control Costs and Increase Profits.

Dynamic Costing is an ebook to download free of charge. This book includes case studies to demonstrate the real-world application of the principles of cost accounting and managing costs.

The practice of cost accounting helps businesses to optimize the use of resources to control costs and maximize profit. Without controlling costs, a business may be at a competitive disadvantage to competitors that can source cheaper materials, use materials more efficiently, hire cheaper labor, or use lower-cost production facilities.

The basic structure of Dynamic Costing is as follows:

1. Introduction to Costs, with discussion of principles and definitions such as fixed costs and variable costs, including the case study, “My Uncle’s Car.”2. Cost Functions, with case studies, “The North Sealand Raspberry Plantation,” “Easymap,” and “The Printing House.”

3. Different Cost Types As A Function of Different Decision-Making Situations.

4. Calculations with case study, “DK Bodywork Parts Ltd.”

5. Guiding Solutions.

Preface

The objective of operations management is to organize the production and sales/marketing efforts in the most appropriate way for the business.

The purpose of a business is to produce a series of goods or services (from this point on, these terms are considered the same and are referred to as goods). It is a deciding factor that this process is achieved as cheaply as possible.

- Private business products: A Harboe non alcoholic beer, a box of Legos, a newspaper, a car repair.

- Public business products: A full year’s work for a pupil in 7th grade, a hip operation, administration of fines

The challenge and problem of costs can be described as:

1. Production of a good requires an effort or consumption of resources that in most cases have a price, i.e. a minimal consumption of re-sources, at the lowest possible price, is essential.

2. This consumption of resources is called costs

3. Producing a specific good at the lowest possible cost is often deci-sive for the long-term success of a business.

4. Therefore it is important to be able to establish costs in order to obtain the necessary management information, required for achiev-ing lowest possible production costs.

5. Achieving as low costs as possible is a very holistic job, involving management, business culture, the right technology, the right inter-nationalisation, the optimal size of production etc.

6. The cost of producing a good vary in terms of the relevant decision-making occasion, which is the content of a dynamic perspective.

A business can, among other things, be described as a string of contracts (nexus, nodes), which combined comprise the fundamental base, the production, and the liquidity access (sales or grants/appropriations).

Such contracts (to buy, sell, establish a production facility, hire staff etc.) are commonly agreed upon with contracting entities outside the group of owners and decision makers. It is therefore essential to understand a number of models which place the firm in the context of its environment.

Concerning the course of and decision-making situations in operations management, there are three central problem areas relating to a firm’s decision analysis, each of which is described in compendiums, paving the way for the possibility of a future book.

- The firm in context (available in English)

- Dynamic Costing, costs in a dynamic perspective

- Dynamic Pricing, pricing in a dynamic perspective

These fields will all be described based on known and solid operations management models and theories. An extension will though be directed towards structuring decision-making in terms of the decision-making circumstances and conditions relevant to the specific occasion.

Content

Dynamic Costing

Preface
1. Introduction to Costs
1.1 Introduction
1.2 Different Cost Definitions
1.3 Fixed Costs vs. Variable Costs
1.4 Separation of Fixed and Variable Costs
1.5 Other Costs Distinctions Relevant for Decision-Making
Case 1.6 The Car Case ”My Uncle´s Car”
1.7 The Management Job
1.8 Assignments for Chapter 1

2. Cost Functions
2.1 Cost Functions in the Short-Term
Case 2.1: The North Sealand Raspberry Plantation
Case 2.2: Easymap
Case 2.3: The Printing House
2.2 Assignments for Chapter 2

3. Different Cost Types as a Function of Different Decision-Making Situations
3.1 Introduction
3.2 Examining Different Cost Types

4. Calculations
4.1 Introduction
4.2 Different Calculation Models
4.3 Activity Based costing
Case 4.1: DK Bodywork Parts Ltd.
4.4 Assignments for Chapter 4

5. Guiding Solutions
5.1 Guiding solutions for chapter 1
5.2 Guiding solutions for chapter 2
5.4 Guiding solutions for chapter 4

Notes

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