Kingdom Fungi

Chapter 21 Notes: Kingdom Fungi! Name_________________________ 21-1: The Kingdom Fungi A. What Are Fungi? Fungi include MANY DIFFERENT types of organisms From tiny yeast cells To the one of the largest organisms in the world! Fungi are: Multicellular (except for yeasts) Eukaryotic Heterotrophic Decomposers: decompose dead and decaying material -Recyclers! -Secrete enzymes OUTSIDE bodies – Absorb digested nutrients Hyphae: long, slender, root-like filament Septa: cross-walls across hyphae (not in all hyphae) Mycelium: mat of interwoven hyphae o Large surface area = max food absorptionFruiting body: reproductive structures, like mushrooms o Many can develop from same mycelium o â€Å"fairy rings† Entire mycelium is haploid! o (1 set of chromosomes) B. Structure & Function of Fungi Fungi cells have cell walls -Contain carbohydrate â€Å"chitin† also found in exoskeletons Unlike plants: -Fungi DON’T have chlorophyll -Fungi have chitin in cell walls (plants hav e cellulose) C. Reproduction in Fungi Most fungi reproduce BOTH asexually and sexually Asexual Reproduction: Sporangia at the tip of sporangiophores produce haploid spores Fragmentation (breaking off) of hyphae can also produce new mycelia Sexual reproductionFungi form hyphae of opposite â€Å"Sex† o Called â€Å"+† & â€Å"-â€Å" The + & – hyphae fuse and form gametangia: o Makes gametes o Form a diploid zygote o Zygote undergoes meiosis: haploid once again! D. How Fungi Spread Fungal spores travel VERY easily in the air All they need is a good â€Å"landing place† with moisture & food Some fungi have special adaptations for spreading spores 21-2: Classification of Fungi A. 4 Phyla of Fungi: Zygomycota Ascomycota Basidiomycota Deuteromycota Named for their reproductive structures! B. Phylum Zygomycota â€Å"Common molds† o On bread, cheese, etc. Black bread mold: Rhizopus stoloniferReproduce asexually (spores) & sexually (zygospores) C. Phylum Ascomycota â€Å"Sac Fungi† o Conidia form spores asexually o The ascus contains diploid spores in sexual reproduction Examples: yeast, cup fungi D. Phylum Basidiomycota â€Å"Club Fungi† 16,000 species: mushrooms, puffballs, bracket fungi, morels Club-shaped reproductive structure Spores form in basidia: o On the â€Å"gills† underneath mushroom cap Many wild mushrooms are poisonous! E. Phylum Deuteromycota â€Å"Imperfect Fungi† Fungi with NO KNOWN sexual stage Reproduction only asexually Ex: Penicillium; also pathogens like ringworm, athlete’s foot 1-3: Ecology of Fungi A. Fungi as Heterotrophs Most fungi are decomposers or saprobes Others are parasites (live on/in a living host) And others are symbionts: live in symbiosis with other organisms Pleurotus ostreatus is actually a carnivore captures & eats roundworms ALL fungi, though, are heterotrophs! B. Fungi as Decomposers External digestion: Fungi decompose matter by secreting enzymes o break i t down into simple organic molecules Fungus then absorb those molecules C. Fungi as Parasites Plants and animals (humans) are subject to fungal diseases Plants: o Corn smut o Mildew o Wheat rustHumans & animals: o Athlete’s foot o Yeast infections (Candida albicans) o Ring worm o Cordyceps (kills grasshoppers) D. Symbiosis Symbiosis is a â€Å"mutualistic† relationship in which BOTH partners benefit Lichens = algae (or cyanobacteria) + fungus o On rocks, dry environments Mycorrhizae = plant roots + fungus o -80% of plants might have these o Fungi help the plants get water & minerals o Plants provide fungi w/ energy E. Fungi & Food! Many foods are made using fungi! Yeast (Saccharomyces) is used to make bread, beer, wine Cheeses (Brie, Blue, Roquefort) are made using mold (Penicillium)

Essay on Possible Development on Contemporary Arts Organization

Organizations all over the world are not without problems and difficulties as they face change on a daily basis while trying to keep their traditions and ideals intact. This is most true with organizations that focus on the traditional market/services while having to unite those services with modern innovations. When we say innovations these does not only pertain to certain technological tangible equipments but it can also mean new processes, means and even situations that can only be created by today’s advancing times.Because of this, it is imperative for organizations to have some plan or strategy that would help them stay afloat without sacrificing what they regard as their purpose. An example would be how the traditional art scene have rapidly decreased in activity because of the more â€Å"cool† contemporary arts or worse, because there are other places people can go to like malls and bars instead of being patrons of artistic ventures or exhibits.Going back, these so called problems that organizations face would be the tremendous growth in diversified clients, members and patrons that tends to create a cultural gap between the members and even the leaders who are handling the organizations. This is most true in many forms and types of organizations but for specificities’ sake, this discussion will focus on the contemporary art organizations that cater to very diverse tastes, attitudes and philosophies.Art, after all, can be regarded as a means of freedom of expression and this is most especially true in today’s art scene wherein freedom of expression is not only an option, it is a necessity. Because of the varied and eclectic people that compose the different art organizations around the world, problems arise on the context that too much diversity can cause confusion among the members which is evidently caused by the wide cultural gap not just between one or two persons but even among everyone who are part of said organization.T his diversity and wide cultural gap is of course caused by how tremendous globalization has been that in one art scene or organization, people from different parts of the state, country and even the world would collate to form that single group. Thus, it is essential that organizations keep in mind certain things if they want to survive such a fast-paced world and if they want to even expand in population and improve in terms of their products, projects and provisions.Of the many discussions and articles that other people have written on different important aspects of organizations, there are some which are enlightening and which are sensible and yet people, mostly leaders and management teams, forget or altogether ignore such aspects. These aspects are mostly centred on the following: lack of purpose of the organization, failure to properly pinpoint the cause of the problem and finally, need for effective strategies that would solve the problem.Lack of Purpose of the Organization I n the article of Wheatley (2008), she describes why terrorists groups are one of the finest examples of organizations in the world as they have a single unifying purpose in their agenda. This metaphor for the best organization is rather unusual and even uncomfortable as terrorists groups create horror around the world with their vendettas but Wheatley (2008) does have a point when she says that they are â€Å"among the most effective and powerful organizations in the world today†.What she presents is an analysis on why terrorist networks have no means to â€Å"formal power, advanced technology, large budgets, or great numbers of followers† and yet, they manage to cause such a strong impact that they are â€Å"changing the course of history† (Wheatley, 2008). This is where one of the most fundamental aspects of any organization should have is presented and it lies in the presence of an â€Å"ideal or purpose that gives them a group identity which compels them to act† (Wheatley, 2008).What Wheatley insists on is true, most especially if it is applied in contemporary arts organizations wherein much passion and ideals are present but sometimes misplaced or even divided. The problem with arts organizations all over is that they have too diversified output for their passions that there is no commonality or unity among what they want, what they want done and what they would like to do in the future.Because terrorist groups have such commonality in their purpose, whatever action or â€Å"project† they undertake, it is almost always successful that the world is compelled to watch or prod on their â€Å"projects†. In the arts scene, passion for the art itself can be their common cause and identifying what do they want to achieve with their organization can make their group more efficient and active; as what Wheatley (2008) wrote, â€Å"As networks mature, they are fuelled more by passion than by information.† Failure to P roperly Pinpoint the REAL Cause of the Problem The advice that Wheatley gave on how to have such a successful organization is to have a unified purpose from such diversified members of the group. This is tremendously connected to another possible means in which to have an efficient and effective organization and that is to acknowledge that a problem exists in the group and that the problem is most likely the persistence of misunderstanding caused by cultural gap.According to Hofstede (2005), problems in art organizations usually arise from the fact that there is too much diversity among cultures and that management groups of the organization are remiss in admitting that that is indeed the problem: â€Å"Many leaders do not wish to acknowledge the possibility of a cross-cultural communication problem in international dealings. If negotiations go wrong they blame others or†¦themselves, never the culture gap. † (Hofstede, 2005) The picture than Hofstede painted is common bu t not unsolvable.What leaders of such organizations should do is admit that that is the problem and that they should think up of strategies that would effectively solve those problems—but that will be discussed later on the essay. With all these difficulties that diversity of culture presents, would it not be better to just have a common art organizations among people who have the same culture? This is not entirely the case for culture does not just mean belonging to the same ethnic background of certain group of people, the culture here encompasses a commonality among a certain group of people.Thus, the people who are into the arts have their own culture but then again, there is also a different culture that separates the visual from the performance arts and even that of the traditional from the contemporary forms of art. This means that there is a diversity of culture within a culture within a culture. This scene is inevitable as how Halbreich (2001) puts it, â€Å"We†™ve just crossed into a new century in which the rate and dimension of change promises to test all our powers of invention†.This new century is the modern times; these powers of invention are the possible ventures that we may undertake to support such cultural diversity. However, it is important to note that cultural diversity is not bad; it is the cultural gap that it creates which is the unpleasant and unfortunate factor. Thus, how do we solve this cultural gap among members of organizations? This is discussed in how management groups should have effective strategies that address the problem and this strategy usually starts in something very simple: admit that there is a problem. The Need for Effective Strategies That Would Solve the ProblemWhen Hofstede (2005) claimed that leaders do not acknowledge the presence of cultural gap, Halbriech (2001) provided the answer to how to solve this: â€Å"We must adapt to become a filter, through which some of these competing worldvi ews can be debated and new communities established. † Organizations becoming a â€Å"filter† mean that it is through them that people would be able to identify where they would want to go and belong to (in terms of patronizing an arts organization) and then zeroing on those identified aspects that leaders would be able to establish a permanent community or organization for them.Thus, what leaders should do is recognize the needs (and sometimes, even wants) of the members, build around those needs and cater to them. For example, Ritzer et al. (2008), isolates a particular problem with the diverse culture in arts organizations wherein the problem is that local colour or culture fails to be reflected in the organization. This just means that they focus too much on a global standard without thinking that the organization should also reflect the â€Å"character of the geographic locales† (Ritzer et al. , 2008).If what Ritzer et al. say is true, then it means that the needs and wants of the immediate members of the organizations are ignored which creates a gap or misunderstanding among the group. A great example in trying to come up with strategies in solving gaps in arts organizations can be seen in the illustration of Halbreich (2001): â€Å"We aim to magnify the ways in which visitors†¦can become more active participants in a series of memorable experiences based on discovering links between art and life, as well as among artistic disciplines.† This illustration demonstrates how the art organization presented by Halbreich is very ideal in the sense that they manage to have a standard or purpose in mind (which is for the visitors to become participants in viewing the art) while thinking about the condition of the other end as well (by considering the real life situation of the audience) and linking the two together. ConclusionIn conclusion, difficulties in arts organizations are inevitable since the members and patrons are varied an d diverse in culture and attitude. Difficulties of such organizations are usually caused by cultural gaps in the group but they can be solved and remedied by admitting that there is a problem caused by the gap, and proving necessary strategies that addresses the issue while maintain true to the ideals of the group.However, one cannot help but think that Wheatley is most correct in her suggestion of addressing the overall issue in arts organizations—development and growth of the group, maintain diversity in the organization, and staying on track with the ideals of the organization—which is having a firm passion in the purpose of the organization since everything else would naturally follow suit. References Cummings, S. (2008). Strategy: past, present and future. The Sage Handbook of New Approaches in Management and Organization. SAGE: Singapore. pp. 184-216 Halbreich, K. (2001). Inventing new models for the museum and its audiences. Curating Now: Imaginative Practice/Public Responsibility. Philadelphia Exhibitions Initiative: Philadelphia. pp. 67-79. Hofstede, G.J. (2005).   A bridge requires a gap. Introduction to Business Communication. Peter Lang Publishing Group: Frankfurt. pp. 163-170. Lustig, M.W. et al. (2005). Introduction to cultural patterns and intercultural communication. Introduction to Business Communication. Peter Lang Publishing Group: Frankfurt.   pp. 171-182. Ritzer, G. et al. (2008). Empty organizations. The Sage Handbook of New Approaches in Management and Organization. SAGE: Singapore. pp. 215-216. Wheatley, M. (2008). Learning about networks from terrorists. The Sage Handbook of New Approaches in Management and Organization. SAGE: Singapore. pp. 178-179.

Medical Tourism in India Essay

After the silicon rush India is now considered as the golden spot for treating patients mostly from the developed countries and Far East for ailments and procedures of relatively high cost and complexity. India is also aggressively promoting medical tourism in the current years -and slowly now it is moving into a new area of â€Å"medical outsourcing,† where subcontractors provide services to the overburdened medical care systems in western countries. India’s National Health Policy declares that treatment of foreign patients is legally an â€Å"export† and deemed â€Å"eligible for all fiscal incentives extended to export earnings.† Government and private sector studies in India estimate that medical tourism could bring between $1 billion and $2 billion US into the country by 2012. Going by the Statistics and various studies it can be easily said that India would be the leader in medical tourism within the next decade if only it could improve the infrastructure and tour attractions. The question or rather the doubt that is often asked by critics is how can India provide top line medical care to outsiders while more than 40% of its people languished below poverty line and less than 20% of its people can actually afford medical services. Ethically and morally this problem has to be solved if India has to move into the category of developed country and also as a place which provides medical care to both its own people and patients from other country The aim of this project is to put a finger on the highly profitable service of medical care combined with tourism in which India is currently considered as a market leader. It has been a known fact for past many decades that Indian doctors are highly skillful in their given field since all around the globe mot hospitals have doctors of Indian origin. Therefore it became almost natural that this trend extended to India. This project also aims to show why India is attracting medical tourists, is it really a secure destination and how India can promote and develop this particular activity in the coming years so as face competition given by other Asian and African options. CHAPTER .2 Research and Methodology Introduction The objective of this chapter is to present the research methodology of the present study. The chapter deals with various aspects of research methodology on Medical tourism in India and a comparative analysis are made. For the present study as more emphasis was laid down on discovery of ideas and insights is can be called descriptive research as on attempt have been made to get insight into the Medical tourism in India. Further, the study is also and descriptive nature as a descriptive study is typically concerned with determines. Here, attempts have been made to find out the correlation of people towards Medical tourism in India. Objective The key objective of the project is to study the emerging opportunities and future prospects in the Indian medical tourism market. The project discusses various industry trends and growth drivers that are fuelling growth in the market and tries to study their impact on the future scenario. Basic Research Problem of the Study Competition and marketing issues are seen as the major problems facing organisations involved in medical tourism. Other key issues are: †¢ Insufficient demand †¢ Insurance and liability issues †¢ Lack of quality standards and international standards †¢ Lack of professionalism within the industry Assumption of the Study According to medical tourism facilitators the leading medical tourism destinations are India, Thailand, USA, Hungary and Malaysia. The USA, UK and Russian Federation are seen as the leading source of patients both now and in the future. Countries rated as providing the best overall service to patients are Thailand, India, and Singapore. Respondents predicted that India, Thailand, and Singapore will also be the leading medical tourism destinations in five years time. Methods of Data Collection The data has collected in two ways. †¢ Primary Data: Primary data are those, which are collected for the first time, and they are original in character. Primary data gives higher accuracy and facts, which is very helpful for any research and its findings. I have collected primary data by personal interview. †¢ Secondary data: The secondary data are those, which are already collected by someone for some purpose and are available for the present study. Secondary data was collected from the magazines, websites and other such sources. CHAPTER .3 Medical tourism: A Global perspective Medical tourism happens when patients go to a different country for either urgent or elective medical procedures. This phenomenon is fast becoming a worldwide, multibillion-dollar industry. The reasons patients travel for treatment vary. Many medical tourists from the United States are seeking treatment at a quarter or sometimes even a 10th of the cost at home. From Canada, it is often people who are frustrated by long waiting times. From Great Britain, the patient can’t wait for treatment by the National Health Service but also can’t afford to see a physician in private practice. For others, becoming a medical tourist is a chance to combine a tropical vacation with elective or plastic surgery. And moreover patients are coming from poorer countries such as Bangladesh where treatment may not be available and going for surgery in European or western developed countries is expensive. The interesting thing of Medical tourism is that it is a concept which is actually thousands of years old. In ancient Greece, pilgrims and patients came from all over the Mediterranean to the sanctuary of the healing god, Aesculapius, at Epidaurus. In Roman Britain, patients took a dip in the waters at a shrine at Bath, a practice that continued for 2,000 years as it was believed that the waters had a healing property. From the 18th century wealthy Europeans travelled to spas from Germany to the Nile. In the 21st century, relatively low-cost jet travel has taken the industry beyond the wealthy and desperate. Countries that actively promote medical tourism include Cuba, Costa Rica, Hungary, India, Israel, Jordan, Lithuania, Malaysia and Thailand. Belgium, Poland and Singapore are now entering the field. South Africa specializes in medical safaris-visit the country for a safari, with a stopover for plastic surgery, a nose job and a chance to see lions and elephants. Thailand While, so far, India has attracted patients from Europe, the Middle East and Canada, Thailand has been the goal for Americans. India initially attracted people who had left that country for the West; Thailand treated western expatriates across Southeast Asia. Many of them worked for western companies and had the advantage of flexible, worldwide medical insurance plans geared specifically at the expatriate and overseas corporate markets. With the growth of medical-related travel and aggressive marketing, Bangkok became a centre for medical tourism. Bangkok’s International Medical Centre offers services in 26 languages, recognizes cultural and religious dietary restrictions and has a special wing for Japanese patients The medical tour companies that serve Thailand often put emphasis on the vacation aspects, offering post-recovery resort stays. South Africa South Africa also draws many cosmetic surgery patients, especially from Europe, and many South African clinics offer packages that include personal assistants, visits with trained therapists, trips to top beauty salons, post-operative care in luxury hotels and safaris or other vacation incentives. Because the South African rand has such a long-standing low rate on the foreign-exchange market, medical tourism packages there tend to be perpetual bargains as well. Argentina Argentina ranks high for plastic surgery, and Hungary draws large numbers of patients from Western Europe and the U.S. for high-quality cosmetic and dental procedures that cost half of what they would in Germany and America. Dubai Lastly, Dubai–a destination already known as a luxury vacation paradise–is scheduled to open the Dubai Healthcare City by 2010. Situated on the Red Sea, this clinic will be the largest international medical center between Europe and Southeast Asia. Slated to include a new branch of the Harvard Medical School, it also may be the most prestigious foreign clinic on the horizon. Other countries Other countries interested in medical tourism tended to start offering care to specific markets but have expanded their services as the demand grows around the world. Cuba, for example, first aimed its services at well-off patients from Central and South America and now attracts patients from Canada, Germany and Italy. Malaysia attracts patients from surrounding Southeast Asian countries; Jordan serves patients from the Middle East. Israel caters to both Jewish patients and people from some nearby countries. One Israeli hospital advertises worldwide services, specializing in both male and female infertility, in-vitro fertilization and high-risk pregnancies. South Africa offers package medical holiday deals with stays at either luxury hotels or safaris. Leading countries in the field of medical tourism CHAPTER .4 Indian tourism: An overview Tourism will expand greatly in future mainly due to the revolution that is taking place on both the demand and supply side. The changing population structure, improvement in living standard, more disposable income, fewer working hours and long leisure time, better educated people, ageing population and more curious youth in the developed as well as developing countries, all will fuel the tourism industry growth. The arrival of a large number of customers, better educated and more sophisticated, will compel the tourist industry to launch new products and brands and re-invents traditional markets. The established traditional destinations founded on sun-sea-sand products will have to re-engineer their products. They must diversify and improve the criteria for destinations and qualities of their traditional offers. Alongside beach tourism, the tourism sector will register a steady development of new products based on natural rural business, leisure and art and culture. Thus the study of new markets and emerging markets and necessity of diversified products are the basis of our strategy, which can enhance and sustain, existing and capture new markets. It is India’s vastness that challenges the imagination: the sub-continent, 3200km (2000 miles) from the mountainous vastness of the Himalayas in the north to the tropical lushness of Kerala in the south, is home to one sixth of the world’s population, a diverse culture and an intoxicatingly rich history. Desert in Rajasthan, tropical forests in the north eastern states, arid mountains in the delta region of Maharashtra and Karnataka and vast fertile planes in northern states of Uttar Pradesh, Haryana etc are just some of the geographical diversity that can be observed. We have a wealth of archeological sites and historical monuments. Manpower costs in the Indian hotel industry are one of the lowest in the world. This provides better margins for any industry which relies on man power. One of the fascinations of India is the juxtaposition of old and new; centuries of history – from the pre-historic Indus civilization to the British Raj – rub shoulders with the computer age; and Bangalore’s ‘Silicon Valley’ is as much a part of the world’s largest democracy as the remotest village is.

Significance of stakeholder management in construction projects Essay

Significance of stakeholder management in construction projects - Essay Example This research will begin with the statement that construction projects result in a product like residential buildings, dams, parks etc. that is further utilized to house a number of other products. A construction project may impact several interests positively or negatively. Positive impacts may include high quality living and better facilities, while negative impacts may comprise deterioration and change to environment not only at construction site but on all levels. Those impacted by the project are referred to as project stakeholders. A stakeholder is a person or a group whose interests are affected by the execution or operation of a project. They may exert influence over the project through their attributes of power, legitimacy, expertise and urgency but may not otherwise be considered as stakeholders. Generally, there are five key stakeholders in every project: project manager, performing organization, team members, sponsor and end user. However, geographical differences and nat ural events directly affect the successful execution of the construction project and may involve a number of unique stakeholders like environmental and community groups being effected by the building process or its operation after completion and may not be involved in other type of projects. Similarly, regulatory agencies who control certain aspects of the construction by issuing permits and certificate are also key stakeholders. These stakeholders, if not managed well, can influence the project by delaying, changing the scope and even cancelling the project.

Develop Assignment Example | Topics and Well Written Essays - 500 words

Develop - Assignment Example With the aid of slides, the computer system will also contain instruction handout to be distributed to students in soft copy. Others include The labor mobility training program is included in the circular in the institutional training package. As such, learners already have a slight exposure concerning such a program. Besides, many professionals including human resource personnels perceived such a program as an important element within every organization since it forms the backbone of productivity of the institution (Wankel & DeFillippi, 2003). It is important for the mobility training program to be delivered to learners within the organizational environment. The availability of working environment and infrastructure are considered towards the delivery of such a training program (Wankel & DeFillippi, 2003).The coursework is developed in such a way that all the learning procedures to suite employees from different departments both the staff and the executives in a similar, but distinct training platform. The package developed will allow for scalability and enhance learning from a simple training domain through real life working environment situations. The main focus of the above part of the revision is to provide an assessment and identification of areas within the training program that may require adjustments. For the labor mobility training program, evaluation of the feedback assessment procedure will be used to determine if indeed the students understood the coursework of the study. Simple questions with very brief answers will form part of the assessment. Some of the questions would require a practical effort while others will be moderated in form of multiple choices. After the final integration of the courseware into the training program, it is important to conduct a prototype training test. Such a test will be carried out for the duration of three weeks as planned by the training department. A good number

Penal Station Objectives Essay Example | Topics and Well Written Essays - 2000 words

Penal Station Objectives - Essay Example The first penal station was established at Newcastle in 1804 and the convicts were put to labor mining for coal and cutting cedar tree. However, with the settlements of the Hunter Valley with colonists, Newcastle was no longer as isolated as it was when it started. And so Port Macquarie was established, and Newcastle closed in 1824. However, Port Macquarie experienced frequent successful escapes, and following an inspection by Commissioner Bigge it was determined that other colony stations be created, and emphasized the need for these convicts to be separated and isolated from the remaining population. As a consequence the Governor of Brisbane developed a penal station at Moreton Bay in 1825. Norfolk Island was also reoccupied, having been abandoned in 1813. The worst criminals were sent to Norfolk Island, and those guilty of lesser offences were transported to Moreton Bay. Meanwhile in Van Dieman's Land a penal station was first established in 1822 at Macquarie Harbour, as it was more difficult to escape from. Unfortunately there were issues with access to the Harbour, and so convicts with minor offenses were sent to another penal station established at nearby Maria Island in 1825. Due to escalating cost though, Lieutenant-=Governor Arthur decided to develop another colony, an din 1830 Port Arthur was established on the Tasman's Peninsula, and in the closing of Macquarie Harbor and Maria Island1.There was a distinct awareness among the governors of the settlements at this time that there was a clear need to portray transportation as an "object of terror," to enable effective and efficient deterrence to future criminal activity in Britain 4,5,6. Subsequently, governors incorporated into their policies, statements that would substantiate the concept of transportation as an act "worse than death". Thus, one of the primary objectives of the penal stations , was to deter others from committing crimes.Another primary objective was for the convicts to be given constant employment, preferably in hard labor4. This was to enable a rigid form of discipline among the convicts, and to provide supervisors and governors with a way to systematically and in a standardized way to oversee the incarceration of the convicts. By way of isolation from the luxuries that were available to the settlements it was anticipated that the third objective could be met, which was reforming of character. As such, it was expected that a number of the transported convicts would become rehabilitate through isolation1, hard labor and the habit making of discipline, as well as perhaps learning new skills such as agriculture, and so return to society as a contributing member. 1 Reynolds, J (1982) The penal stations of New South Wales and Van Dieman's Land. p. 356 4. Shannon. (1968) J.T.Bigge "Report to the Commissioner of Inquiry' British Parliamentary Papers: Colonies,

Economics Assessment Assignment Example | Topics and Well Written Essays - 1500 words

Economics Assessment - Assignment Example Gross Domestic Product (GDP) The GDP is an important primary economic indicator for assessing economic growth of a country as it impacts on the businesses, industries and people. The economic growth measured by comparison over a period of time indicates trends in the economy. GDP Real growth rate refers to GDP growth on an annual basis adjusted for inflation and measured on year-over-year basis. GDP real growth rate North Korea South Korea 2012 (est.) 2.7% 2011 (est.) 0.8% 3.6% 2010 (est.) -0.5% 6.3% 2009 (est.) -0.9% The GDP real growth rate of South Korea during 2010 to 2012 reflects the effect of slowdown in the international economy consequent upon the US subprime crisis and financial crisis in Europe due to its level of exposure to international trade. The strength of the country’s economy could be assessed meaningfully by comparing its GDP growth rates with the other developed countries’. ... The developing countries like India (4.5%) and China (7.9%) have higher GDP growth rates as they were not affected by subprime or European financial crisis. North Korea’s GDP growth compared to many of the developing and under-developed countries has been poor. The country had negative growth in 2009 and 2010 against good performances of several Asian and African countries during this period. The industrial development achieved by South Korea over the period of time is linked to its external trade and GDP growth as can be observed from the following table. External Trade of South and North Korea (USD 100 million) North Korea (A) South Korea (B) B/A 2010 2011 2010 2011 2010 2011 Trade Amount 41.7 63.2 8916.0 10796.3 213.8 170.8 (22.3) (51.3) (29.9) (21.1) Exports 15.1 27.9 4663.8 5552.1 308.9 199.0 (42.5 (84.2) (28.3) (19.0) Imports 26.6 35.3 4252.1 5244.2 159.9 148.6 (13.2) (32.6) (31.6) (23.3) Notes: 1) Excludes bilateral trade between North and South Korea. 2) Figures in par entheses represent rates of growth over the previous years. Source: The Bank of Korea, p. 6. â€Å"Historically, from 1971 until 2012, South Korea GDP Annual Growth Rate averaged 7.23 Percent reaching an all time high of 18.20 Percent in September of 1973 and a record low of -7.30 Percent in June of 1998. South Korea’s economy became one of the most diversified and technologically advanced in the world in the last 50 years† (Trading Economics, 2012). The sanctions imposed on North Korea by the US and European community has affected the country’s internal trade severely. Apart from South Korea, other trading partners of North Korea are mostly the developing nations of the world. The comparative performance of the two countries reflects the weakness in the political system

Reflective Practice Statement Essay Example | Topics and Well Written Essays - 2000 words

Reflective Practice Statement - Essay Example DeFillippi believe that reflection is crucial to learning because it helps to convert "convert tacit experience into explicit knowledge" (p.6). Reflective practise, as a concept of learning, was introduced into several professions in the 1980s. The rationale behind it is that by thinking about things that have happened to us, in a different light, we gain more knowledge and a better perspective, which enable us to take some kind of action. It is therefore seen as an important process by which professionals "learn from experience in order to understand and better develop their practice" (Jasper, 2003, p.2). The concept of learning from reflection was a product of the work of several educational theorists; one important figure in this regard is Dewey (1938) who argued that 'we learn by doing and realising what came out of what we did'. However, this theory has seen severally modified and developed by contemporary theorist. One of such is the 'experiential learning theory' developed by Kolb in the 1980s, where he drew our attention to the fact that, when we attempt to learn from something that has already happened to us, we ne ed to recall our observation of the events and then reflect on the observation in some way (p.3). This theory was the perhaps the first to demonstrate the cognitive process of learning by particularly expressing the importance of critical reflection in learning. This theory stressed the fact that the main thrust of learning efforts lies in the manner in which we process experience and a major part of this, is our ability to critically reflect on experiences. Learning was described to occur in a cycle that "begins with experience, continues with reflection and later leads to action, which itself becomes a concrete experience for reflection" (Kelly, 2005). Kolb's work further refined the concept of reflection, as it applies to learning, and divided it into two separate learning activities, which he referred to as perceiving and processing (Algonquin, 1996). The perceiving stage is when the actual learning takes place, while processing is when such learning is re-appraised in the light of previous experiences. A third stage called 'Abstract Conceptualization', where it is believed that we try to find answers to the questions raised during the critical reflection stage. In this attempt, we make generalizations, draw conclusions and form hypotheses about the experiences; and the fourth stage 'Active Experimentation', where we try these hypotheses out, were further proposed (Kelly, 2005; Algonquin, 1996). In the words of Kolb, in the Abstract Conceptualization phase, "learning involves using logic and ideas, rather than feelings to understand problems or situations. Typically, we would rely on systematic planning and develop theories and i deas to solve problems." While in Active Experimentation, "Learning in this stage takes an active form - experimenting with, influencing or changing situations. We would take a practical approach and be concerned with what really works..." (Algonquin, 1996). Besides the experiential learning theory, the motivational theories also have great implications for reflection and learning. The importance and impact of motivation on human actions was first highlighted by the research now popularly known as the Hawthorne Studies, conducted by Elton Mayo from 1924 to 1932. In the

COPD Essay Example | Topics and Well Written Essays - 2000 words

COPD - Essay Example From this study it is clear that to understand this condition, it is vital to revisit the mechanism of gaseous exchange as a process keeping in mind the paths through which the gases inhaled or exhaled flow through. Physical examinatonn is the process by which a researcher uses their senses to gather and collect data that is objective to the research that they are doing. It is a very important step in the treatment and caring of COPD patients. For this process to be successful, the researcher has to have good assessment skills that will ensure that the physical examination is successful. Before the beginning of the research, the researcher has to define the normal findings so that incase an abnormal findings occur, the researcher is fast in noticing. The history of the patient that is being examined is also very important. There are four main approaches to physical assessment. This is inspection, percussion, palpation and ausculatation. Inspection approach is one of the preliminary s tages for this assessment and involves patients being checked in an overall manner so that the health care professional can detect any abnormalities. This process is very critical and should never be skipped as it ensures that a strong base is set for the assessment. Palpation is the process where the professional uses his/her hand to make an inspection on the patient. This has one major limitation that the professional has to be very experienced in the palpation process otherwise wrong results would be given. Percussion follows and the professional taps the area that is affected to hear the sounds that comes out. It also needs a lot of experience. Auscultation s the process where the stethoscope and listens to the various sounds that are made by the affected parts. This has one major advantage that it does not require a lot of knowledge and experience to write. A research done by Edmunds to find out the effectiveness of various physical assessments was done in 2007. According to th e study the main aim of the research was to find out the best approaches to use in physical assessments. The research found out that there were very many setbacks for this assessments and that there were many corrections that are needed in this field. The main correction that needs to be done are on the palpation stages. This is because most of the professionals performing this action are not qualified for this and as a result, they give out wrong information. The most important communication skill that the research proposes is best for physical assessment is assertiveness and proper listening skills. This ensures that the professional detects different conditions that are affecting the patients. Communication skills are also vital to the treatments of COP. Being assertive is one of the communicative skills that are necessary for the health professional to have During the inspection of inhalation of air by the patient, the gaseous mixture accompanied by the aforesaid pollutants pass through to the wind pipe downward to the bronchiole tubes.  

Three Brief Topics Essay Example | Topics and Well Written Essays - 1250 words

Three Brief Topics - Essay Example Eliade's The Sacred and the Profane are enlightens three categories. The Sacred which is a transcendent referent such as God or Nirvana, hierophany which is the advancement of the sacred into human experience where he discusses the revelation of the sacred in a person's life and the third category is idea of homo religiosus where Eliade considers the appreciation and devotion of one to such a breakthrough of supreme power. He describes numinous experience as an appropriate experience of the Sacred by religious human beings or homo religiosus. When a person can experience the amazing, mysterium tremendum and fascinans, both are awesomely fearful and the enthrallingly captivating aspects of the Holy or the wholly other. In expanding and expounding the phenomenological dimensions of the Sacred, Eliade describes the sacred experience in human being as a crucial point of orientation and at the same time it also reveals the ontological reality which is its source of homo religiosus experie nce. For an instance the space is characterized as the boundary between sacred and profane and thus locates the axis mundi as centre. Thus temples and tepees, homes and hearths become sacralized for homo religiosus. ... According to Gerardus even the most ordinary events such as the customary associations with one's neighbors or similarly one's long familiar tasks prove to be replete with mystic interconnections if one examines them more closely. One can completely ignore his own scheme of explanation in terms of single causes and can misconceive life as a broad current of mighty powers. If, for instance, one of the Toradja tribes in Celebes is preparing for an expedition and an earthen pot is broken, then they remain at home, saying that it is measa. This may be translated as a sign, indicating some future misfortune, but that the current of life has been interrupted: If then one thing has been broken, why not more Similarly, when a Ewe tribesman finds refuge from his enemies on a white ant hill he ascribes his escape to the power residing there. Thus the place, the action, the person in which the power reveals itself receives a specific character. Bearers of mana, for example, are sharply distingu ished from the rest of the world: they are self-sufficient.2 References: - The Nature of Religion. The Sacred and The Profane Pages 8-18 by Eliade Mircea Religion in Essence and Manifestation, volume 1 Chapter 4 Potency. Awe. Tabu. by Gerardus Van Der Leeuw, (1967) Pages 43-51 The nature and elements of myth Q2. Discuss the nature and elements of myth and explore a particular myth using the frameworks in the following texts: Chapter 2- Myth and Religion. In Myths: God, Heroes, and Saviors by Billias Leonard J (1986). Chapter 3 'Five monolithic theories'. The Nature of Greek Myths by Kirk G S (1974). Answer: - Myths are the stories from the remote past as in another world or an earlier stage of this

Differents between Product & service Essay Example for Free

Differents between Product service Essay Assignment Topic: â€Å"Difference between Product and Service Market† Product: In marketing mix, product is very important elements. Product means the need satisfying offering of a firm. Service: A service is an intangible product that provides benefits to consumers and often involves human or mechanical effort. Service is also a deed performed by one party for another. Differences between Product and Service marketing: I think, there is nothing like a pure product or a pure service in actual life. Most of the time they come bundled together. When we visit a restaurant, we look forward to the food (product) as well as atmosphere and experience (service). I found many differences between PM SM. Given it bellow: Products come to customers whereas customers come to services. Product benefits are embedded inside the product and can be transported to their customers through distribution channels. Services are location-based and the customers need to travel to theses service. Customers like many of their products to be standardized but they want most of their services to be customized. The quality expected from a product is mostly depends on its manufactured time, which materials are used etc. On the other hand, quality expected from a service is very different. It depends on how the service providers are selected, trained and motivated. The products are tangible and can be sampled before buying. On the other hand, service is experiential and sometimes based on a belief. The product market is scaled up by  expanding the manufacturing capacity, distribution and sales and access to more customers. On the other hand, the service market is not easy to scale up. A product (flat, car, machine ) can be owned and can go into the balance sheet as an asset. But a service cannot be owned and as is shown as an expense. The customers buy products essentially for the value they find inside. On the other hand, the customers buy services for the value of they find in the encounter with the service provider In product market, the managers are the heroes. On the other hand, in service market, the front line employees are the real heroes. Word-of-mouth is much more influential in a service purchase than it is to a product purchase. (source: \\google.com\images) 4p’s of marketing: Product: Offering the right product, service or experience. An actual product is depends on product variety, quality, features, design, brand name, packaging, sizes, services, warranties, return. Price: Controls the perceived value and satisfaction. Actual price is created by list price, discounts, payment periods, allowances and credit value. Place: Allows customers easy access to product and supports. Before choose a place to think about distribution channel, coverage, suitable location, easy transport system etc. Promotion: Communicates the offer and value pro-position. Like sales promotion, advertising, sales force, public relation, direct marketing etc. There are also 3p’s of service marketing. Given it bellow: People: It refer to all people directly or indirectly involved in the consumption of a service. For example: employees and other customers. Physical evidence: It is related to the environment in which the service is delivered and tangible that helps to communicate and perform the service. Process: It is the delivery and operating system of procedures and flow to activities which services are consumed.

Use of Price Elasticity & Income Elasticity of Demand for Businesses Essay Example for Free

Use of Price Elasticity Income Elasticity of Demand for Businesses Essay Price elasticity of demand and income elasticity are two important ideas in practical business activities. Price elasticity, which is represented by PED, measures the changes of one product’s demand in response to a changing in its price. We can write an equation in this way: Price elasticity of demand = percentage change in quantity demanded of the product / percentage changes in price of the product. This is abbreviated to: XED=%ΔQD / %ΔP. Income elasticity of demand (represented by YED) shows the relationship between a change in quantity demand and the changing in income. The equation can be written as: Income elasticity of demand = percentage change in quantity demanded / percentage changes in income. Abbreviated to: YED=%ΔQD / %ΔY. These are just two terms, but how they work is the most important part. For companies, price elasticity of demand is actually effects of prices’ changing on its own sales of products; and income elasticity of demand is effects of consumers’ changes on its sales. Generally speaking, learning the two relationships can help the business find out the situation of the market and make right decisions. Price Elasticity of Demand (PED) The value of price elasticity of demand is usually negative. The product with high value of PED is described to be elastic, while for one with low PED is said to be inelastic. Just an example to show this idea: when Mc Donald rises its price of burger from $2 to $2.3, and its demand falls from 20 million to 14 million, so its PED= (14 million-20 million)/20 million / (($2.3-$2)/$2 = 30% / 15% = 2. It’s a quite big value of PED, so this is elastic. In order to show the degree of elasticity, we use graphs. There are generally 5 types of graphs, and through them we can see the product’s PED, and company can make decisions in different situations. Type 1: Elastic demand (Please ignore the numbers on it.) This occurs when a given % change in price causes a greater % change in demand. In this kind of graph’s condition, the value of PED is greater than 1 and less than infinity. It usually happens when the company has close substitutes, so a little change in price can cause a big changing in demand. When in a company the PED graph gets like this, it should consider decreasing the price a little to achieve more consumers. From the graph, we can see when the price drops a little, the area of revenue increases much. Type 2: Inelastic demand This is when a given % change in price causes a smaller % change in demand. Its PED value will be greater than 0 and less than 1. Goods with this graph are usually necessaries, and even a relatively high change in price would not cause a big decrease in demand. Or, there are no big substitutes closely, so most consumers will still choose to buy it even if the price rises. Type 3: Unit price elasticity of demand This is when a given % change in price results an equal % change in demand. Its PED value will be exactly 1. In this condition, the PED is easy to handle, because the price and the quantity demanded is proportional, so the revenue will remain constant. Thus, the company can change the price flexibly depending on the market’s situation. However this may not happen so frequently, because the real market is much more complicated. Type 4: Perfectly elastic demand This occurs when a constant price will cause the infinite change in the quantity demanded. In this case, the value of PED is infinite. For example, 2 people are selling the exactly the same goods in a small area, and if one of them gets his price below the other one, then he will get all of the consumers. This doesn’t happen frequently, because there may not be such goods that are exactly the same but different in price in a certain area. Type 5: Perfectly inelastic demand Perfectly inelastic demand curve describe the situation for the company that the price’s change will have absolutely no affect on the demand. PED here is 0. No matter how much the price increases or decreases (mostly increases), the demand will not change any. This often happens to the necessaries or monopolies that people have to choose to buy the good even the prices changes rapidly. For example, the gasoline’s price changes from $2.3 to $3.5, the demand will still remain about the same, because for such goods consumers have to pay for it. Conclusion: Different goods will have different PED charts. Companies should change its price depending on different kind of charts. Generally, if a goods is in a competitive market, it can be high elastic, so it should consider to lower the price to increase revenue; contract to it while in a relatively not so competitive market, it can rise price to increase revenue when its PED is low. The goods that are new in the market should decrease the price to survive and achieve higher revenue (new products usually has high PED). Luxuries are mostly elastic, since they are not essential goods. However, PED is not exactly what it would happen in the market; it is limited in many situations, that the practical market condition and the competitors’ changing may have effect on the demand. So it’s better to just make it as a supplement, but not relying on it.

Assessment and Management of Pressure Ulcers: Nursing Interventions

Assessment and Management of Pressure Ulcers: Nursing Interventions Pressure ulcers continue to present a prevalent concern for patients in health care facilities and the incidence is even expected to rise further with the increasing age of the population. This is a problem that has high potential to be prevented. Therefore, the prevention, assessment, and management of decubitus ulcers are of great importance to healthcare professionals who are charged with the care for these individuals (Clarke et al., 2005). Pressure sores occur when there are localized areas of tissue damage or ulceration of the integument second to decreased blood supply disruption to these soft tissues. This occurs as a consequence of constant pressure, where the pressure exerted on an area is greater than the capillary pressure causing ischemia, friction, or shear force. Florence Nightingale, often considered the pioneer of nursing, recognized in 1860 that quality nursing care can prevent the occurrence of decubitus ulcers among patients (Ousey, 2005). Quality of care will be increased with the implementation of nursing interventions surrounding bed sores. Pressure ulcers present a cost to the health care providers, both financially and time. Pressure ulcers can increase nursing time up to 50%, which is relatively substantial considering many healthcare facilities face nursing staff shortages (Clarke et al.). According to the article written by Joan Wurster, the cost of pressure ulcers is substantial with stage one, two, and three stage ulcers costing between $2,000 and $30,000, and stage four pressure ulcers costing up to $70,000. The cost involved with treating such bed sores often times exceeds the cost of prevention by a large sum of money (Wurster, 2007). Preventative measures are, therefore, essential to implement and include interventions. There are several guidelines listed in National Guideline Clearinghouse regarding pressure ulcers including Assessment and Management of Stage I to IV Pressure Ulcers. This guideline establishes several recommendations such as assessing a patients risk using the Braden Scale, use of special pr essure reducing mattresses, managing adequate nutrition. If a pressure sore is to develop, evidence shows that a proper high-protein diet, the use of wet-dressings, and hyperbaric oxygen as treatments all promote the wound healing process. In taking such actions, the goal of the healthcare provider is that the patient will be free of pressure ulcers during hospitalization and appropriately assessed and managed if one does occur (Registered Nurses Association of Ontario, 2007). Research shows that using evidence-based guidelines, which incorporate scientific evidence and clinical expertise, are the premise of successful prevention and treatment of pressure ulcers (Clarke et al., 2005). Assessment of Patient Risk Using the Braden Scale Prompt and accurate risk assessment is critical in preventing the formation of pressure ulcers. The Braden Scale was created and is now used in countless hospitals to facilitate and guide the nursing care team in their evaluation. Not only can this assessment tool inform a health care professional of any propensities towards skin break down, but also may allow him or her to treat the condition prophylacticly if indicated. Rather than just risk assessment, the Braden Scale may be used for evaluation of the current effectiveness of ulcer care regime for patients with existing ulcers (Braden Maklebust, 2005). The Braden Scale was created in 1984 by Barbara J. Braden, to accurately and systematically describe the risk for development of pressure ulcers (Braden Maklebust, 2005). This scale includes six subscales: sensory perception, moisture, activity level, mobility, nutrition status, as well as the skins exposure to friction and shear forces. Using established guidelines, the nurse assesses the patient and associates his or her findings with a numerical value. These are combined and a patient is given a total score which is indicative of the clients risk of developing a pressure ulcer (Ousey, 2005). Final scores can range anywhere from 6-23. A person is considered at risk if their resulting score is less than 18, as this is the point research shows the relationship between ulcers and risk factors becomes relevant. The lower a patients score, the greater threat they experience of developing a pressure sore (Braden Maklebust, 2005). This information can be used to determine what preventat ive practices can be implemented, as well as the establishment of baselines to gauge the effectiveness of the practices. It should be standard protocol for healthcare facilities to have their staff use the Braden Scale or other objective risk assessment tools when appropriate. Currently, most accreditation agencies now require some form of risk assessment, yet often assessment are shortened, excluding vital factors and skewing the validity of the assessment (Braken Maklebust, 2005). It is up to hospitals, or other care facilities, to ensure that these measures are being implemented. It is best if a minimum standard protocol is established, and the frequency of assessments tailored based on the individuals needs. Recommendations suggest an assessment upon admittance and base the remaining intervals off of the stability of the patients condition. In an acute care setting it is suggested patients be reassessed at least every forty-eight hours, if not more frequently. ICU patients should be reassessed daily if they remain in a stable state or every shift if they are not (Braken Maklebust, 2005). In the e vent of the discovery of the indicators of pressure sores then increasingly aggressive preventative measures can be implemented to prevent the occurrence of ulcers, and minimize the discomfort or complications to the patient. Once standard protocols are integrated it is important to evaluate their effectiveness. Baseline values must be obtained. Since the goal surrounding this nursing intervention is reducing the frequency, it would be logical to obtain the rate at which pressure ulcers are occurring, taking into account the demographics of the patients being evaluated. Braden scale assessment totals and other assessment findings such as erythema, non-blanching hyperaemia, blisters, discoloration, and localized heat and edema, should be documented for each patient and checked for improvement for the individual (Braden Maklebust, 2005; Ousey, 2005). Proof of this documentation must be recorded. After a healthcare facility establishes a standard for using a risk assessment tool at a set interval, the rate should once again be evaluated and compared to the original figures to note any improvement. Studies have been conducted in a similar fashion to evaluate the success of employing the Braden Scale into com mon practice. A study found that patients in a large tertiary care ICU, after Horn and colleagues implemented use of the Braden Scale and preventive protocols, the incidence of pressure Ulcers among the most critically ill patients decreased from 33% to 9% ( as cited in Braden Maklebust, 2005, p. 71). Statistical analysis shows that including the use of the Braden Scale in your plan of care can reduce the rate of pressure ulcer formation substantially, making this guideline applicable to the patient goal. Use of High Specification Foam Mattress Pressure ulcers occur as a result of decreased capillary blood flow to dermal tissues, as oxygen and nutrients are not delivered, and wastes not removed. The use of support surfaces, such as mattresses, mattress overlays, or dynamic support surfaces, is an intervention for prophylactic treatment of pressure injury. In order maintain some perfusion, the external tissue pressure must remain above the capillary closing pressure of 33 mmHg. This is of extreme significance around bony prominences , including tissues over the sacrum, Ischia, greater trocanters, external malleoli, and heels, all of which are frequent areas susceptible to impaired localized skin integrity (Thomas, 2008). According to Ousey, this information is very pertinent, especially when doing a comparison to the force between bony prominences and a standard hospital mattress. These forces ranged between 70 and 100 mmHg, clearly above the capillary closing pressure. If a patient is unable to move, this pressure is too great for the body to handle, and tissue damage occurs (Ousey, 2005). The use of high specification foam mattresses cradles the body in its entirety and distributes the weight so pressure is distributed over a larger surface area (McInnes, Cullum, Bell-Syer, Dumville, 2008). The goal of replacing the mattress or using other supportive surfaces is to reduce the pressure between the patient and the supportive surface below 33mmHg, allowing for blood flow in those patients who are immobile or have decreased sensation (Thomas, 2008). Preventative transfers of patients of moderate to high risk for developing pressure ulcers to high pressure reducing surfaces has the ability to substantially decrease the prevalence of pressure related injuries. The Prevention and Management of Pressure Ulcers article states that when compared to a standard hospital mattress, a number of pressure-reducing devices lower the incidence of pressure ulcers by about 60% (Thomas, 2008, p. 243). Regulation surrounding this issue should be instituted as part of the creation of the plan of care when considering prediction and prevention of decubitus ulcers. Evidence-based research shows that there is no significant difference between eh use of alternating pressure dynamic air flow beds, silicone overlays, foam overlays, sheepskin overlays, or other air filled devices. Health care facilities should take into account the cost and ease of use when purchasing these (Reddu, Gill, Rochon, 2006). Once again, in order to evaluate effectiveness, baseline values of the grade and prevalence of ulcers must be obtained and compared with values obtained at a later time after changes in care have been implemented. It is important to note such things as the age, activity tolerance, gender, present illnesses, and type of supportive surface used to prevent the formation of an ulcer. A guideline followed in an experiment conducted by de Laat, preventative transfers were arranged prior to ulcer formation in the event of finding nonblanchable erythema or an expected immobility exceeding seventy-two hours. Following these procedures surrounding preventative transfers, as well as the sound clinical judgment, proved to be the of the strongest statistical significance in reducing the pressure ulcer density grade II-IV within a one year time period (de Laat et al., 2007). The use of pressure-reducing surfaces, especially if used as a early, is another intervention that will help reach the patie nt goal of preventing the occurrence of pressure ulcers. Managing Nutrition Insufficient nutrition predisposes individuals to developing a pressure ulcer, as well as delays the healing process of sores that do form. Proper nourishment and hydration are behind all body processes, both vital in function and not. It is imperative to maintain good nutrition to provide an optimal environment so that homeostasis may be maintained. However, it is a common occurrence that clients who are admitted to the hospital dont have optimal intake of food or water due to a variety of factors including eating nothing by mouth prior to surgery, unconsciousness, feeling of nausea, presence of illness, polypharmacy, and physical or mental disability (Ousey, 2005). These conditions may result in poor nutrition or malnutrition statuses. The problem lies in the fact that there is no definitive diagnosis for undernutrition. Weight loss and biochemical data of hepatic proteins are the accepted standard. Albumin, pre-albumin, and hemoglobin levels are analyzed. Even though these indicat ors help health care professionals evaluate possible nutrition issues and possibly identify those at risk for developing, they can fluctuate due to underlying disease or hydration status (Dorner, Posthauer, Thomas 2009; Thomas, 2008). Inadequate intake of calories, proteins, fluids, vitamins, and minerals, as well as a low body mass index, may result in impaired skin integrity. It is not yet universally accepted that nutrition status is directly linked to the development of pressure ulcers because studies have not been producing consistent results showing the relationship. On the other hand, there is an accepted correlation between nutritional status and wound care healing. Therefore, it is essential that clinical malnutrition is prevented. A well-balanced diet high in protein is necessary for the healing of pressure ulcers (Dorner, Posthauer, Thomas 2009). Increased calorie and nutrient consumption is required to overcome the hypermetabolic state and increased energy needs. Carbohydrates are needed for the synthesis of glucose, glutamine is needed to serve as a fuel source for epithelial cells, arginine is supports the formation of protein, fluids are needed to serve as a solvent and transportation, ascorbic acid for the production of collagen, and zinc for collagen formation, protein synthesis, and cell proliferation. Perhaps the most important nutrient needed for wound healing is protein. It is needed to maintain nitrogen balance and for the synthesis of enzymes involved in wound healing and collagen and connective tissue production. In order to ensure that all clients have met these nutritional needs, support may be desirable. These include consultation with a dietitian, consultation with a speech pathologist if indicated, use of nutritional supplements, enteral feeding, and parenteral nutrition (Dorner, Posthauer, Thomas 2009). All people are at risk for malnutrition whether young or old, so upon admission, all patients nutritional status should be assessed to determine existing or potential malnutrition, and referred for further help if indicated. Throughout the clients stay at the hospital, all patients intake should be monitored for nutritional value and fluid consumption. If indicated additional supplements should be given within recommended daily intake norms if needs are not met. The obtained information on nutritional status must then be compared with progress made in the healing of the pressure sore, including decreased size and depth, as well as decreased exudate. Reassessment of hepatic lab proteins and body weight may be recorded multiple times to evaluate any improvements. Adequate nutrition may prevent the development of pressure ulcers. More importantly a well balanced-high protein diet can be used in the management of pressure ulcers in the aspect of promoting healing if a pressure ulcer does develop (Ousey, 2005). Use of Moisture-retentive Dressing In the event that all preventative measures have failed, and a pressure ulcer does form, it is recommended that moisture-retentive dressings are used to encourage healing. Moist wound treatment has shown to be optimal in promoting reepithelialization. According to Thomas, Moist wound healing allows experimentally induced wounds to resurface up to 40% faster than air-exposed wounds (Thomas, 2008, p. 246). There are now dressings, called occlusive dressings that were developed to maintain the moist environment. There are other benefits to using this treatment as wounds are further protected from infection and pain is reduced (Thomas, 2008). The introduction of occlusive dressings as a primary treatment is beneficial. Several types of occlusive dressings may be used, such as polymer foams, hydrogels, hydrocolloids, alginates, and biomembranes. All of these have proven to be effective. Four out of five trials comparing hydrocolloid dressing with a moist gauze dressing demonstrated higher healing rates (Thomas, 2008, p 250). Effectiveness of treatment can be evaluated in the time needed for complete healing. Decrease in size and depth, reduced erythema , no exudates production, and increased collagen synthesis are all signs and symptoms indicating healing of pressure ulcers (Ousey, 2005). Hyperbaric Oxygen Treatment Hyperbaric oxygen (HBO) therapy for chronic wound care is a relatively new concept. Sometimes pressure sores take a prolonged period of time to heal. In HBO therapy, the patient intermittently breathes 100T% oxygen, while the pressure exerted on the body within the treatment chamber is raised to greater than 1 atmosphere absolute (Hunter, Langemo, Anderson, Hanson, Thomson, 2010, p 116). Often chronic wounds take a longer duration to heal due to ischemic injury, and hyperbaric oxygen therapy directly addresses that. These specialized conditions are at the root of why hyperbaric oxygen therapy proves to be beneficial. In these chambers, the amount of oxygen availability is significant and increased atmospheric pressure causes oxygen exchange between the air and the tissues (Hunter et al., 2010). This regime involves effective management and treatment of pressure ulcers in the event a pressure ulcer does not heal. Although not available at all facilities, hyperbaric oxygen therapy should be recognized as a treatment option for chronic pressure ulcers. Patients should be presented with the option if indicated. To ensure this alternative treatment is presented, it should become a standard requirement to document it. If this becomes the choice of therapy, it is necessary to evaluate the effectiveness of the treatment by looking for signs of ulcer healing. In one study, chronic wounds were monitored for an eight week time period with hyperbaric therapy. The results showed shrinking of wound size in all participants and even a 16% healing rate (Hunter et al, 2010). Similar standards would need to be implemented with therapy to ensure its efficacy to the individual patient. Hyperberberic oxygen treatment should not be mandatory, but recognized as an option when considering the patient goal of managing pressure ulcers. Conclusion Although pressure ulcers are a problem found in many healthcare facilities, it is a problem that has a wide range of solutions. Decubitus ulcers can negatively affect a clients quality of life and there are potential medical complication, including coma and death associated with this condition. Proper assessment and management of pressure ulcers is a reflection of quality of care. Evidence-based nursing interventions such as assessing a patients risk using the Braden Scale, use of special pressure reducing mattresses, managing adequate nutrition the use of wet-dressings, and hyperbaric oxygen as treatments, have been proven to be effective and are all of great importance in improving patient care (Registered Nurses Association of Ontario , 2007). The goal of keeping patients free of ulcers during hospitalization and proper management of pressure ulcers if one does develop, must be at the root of all tasks. Evidence Based guidelines must be established and disseminated throughout the United States, and practiced in order to reduce the frequency and improve the care surrounding pressure ulcers.

Defining Good Advice :: Defintion Essays

Defining Good Advice Good advice started out as something that I could grasp. It was something I was able to understand. But that all changed. What is it exactly that constitutes good advice? When we started this discussion a couple weeks ago, I knew what good advice was, or at least I thought I did. Good advice was something that came from the mouth of someone I respected and looked up to. It came from my parents, grandparents, and Davey, the man I wrote about in my narrative. Good advice usually lead to something good, but sometimes bad things were the result of that good advice. Consider the situation of me telling on my best friend for drinking. Davey told me, â€Å"stick to your guns, Perp.† And I did. I told on my best friend. â€Å"Everybody turned their heads when I walked by in school.† That couldn’t have been â€Å"good advice†. So if good advice can lead to bad things, then how can it be considered good advice? Well, I have tried to look at it in a simple way, but it just got more and more complex. Maybe it can be related to Douglas Crane’s comment about example C on contractions. â€Å"This part I would love to toss out and never consider, but it’s impossible to deny the information given.† And, as I said in our discussion on contractions, â€Å"I have no need for example C because it is way too much information for me right now. But who knows, maybe later I might need that much info, but as for now I don’t.† Was I really ready for his advice? Looking back, I don’t think I was, being sixteen and all. And that is what made his good advice so hard to understand. My mind could not comprehend the â€Å"big picture†. But Davey’s mind could. He had already been sixteen. He absolutely knew that it would help me in the future. I am now twenty years old and a little more wiser, which made me come to the conclusion that Davey was right, because even though his advice ended up hurting me, I am a stronger person now because of it. I still use his advice today, even with the negative consequences involved. Some people have told me I am stubborn. I just tell them that I am â€Å"sticking to my guns†. Advice can be given in any manner, but that doesn’t make it good or bad advice.

America is Not Responsible for September 11 :: September 11 Terrorism Essays

America is Not Responsible for September 11 I am starting to hear something somewhat disturbing about the September 11 attack on the United States. I hear people in the press saying it. I hear it from foreign spokesmen and organizations. And now I hear students and professors agreeing. What they are all saying is that American foreign policy is responsible for this attack. This is not the first time I have heard it. I read this when I was researching Internet sites in the Middle East for a school project. But now I hear it in America. Well, I absolutely reject that belief. And before you start down that road, let me give you an alternative argument and the facts to accompany it. In today's world of sound-bite journalism and quick, dumbed-down answers, this is an easy solution to a problem that doesn't have an easy solution. Sure, jump on the bandwagon. Blame America for all the bad things that happen to her. We are big, powerful and an easy target. Why not blame us? Who else can you blame? Well, simply put, the United States did not plant the bombs that have killed close to 9,000 Americans in the last decade. Someone else did. Nine thousand Americans were lost in terrorist bombings around the world in a decade. Still think this is our fault? There are some good critiques of American foreign policy. But when do we say enough is enough? When do we put the safety of our citizens above public opinion in other countries? Can we not say to the world that "these are our policies, they are based on good values and sound judgement," without fear of being killed? The answer is yes, we can, we will and we must. If we do not, then the hatred of a small minority dominates the rule of law for the vast majority. Let us examine the American foreign policy that is so terrible that terrorists feel justified murdering people in the hundreds and thousands at a time. I think you will see it may not be the root of all evil. First, let us examine our relations with Israel versus the Palestinians. This is the center of the criticism laid upon the backs of Americans dealing with the Middle East for at least 40 years.

Essay --

Customs and traditions differ from one part of Nepal to another. A conglomeration lies in capital city Kathmandu where cultures are blending to form a national identity. Kathmandu Valley has served as the country’s cultural metropolis since the unification of Nepal in the 18th Century.A prominent factor in a Nepali’s everyday life is religion. Adding color to the lives of Nepalis are festivals the year round which they celebrate with much pomp and joy. Food plays an important role in the celebration of these festivals. Religion: Nepal was declared a secular country by the Parliament on May 18, 2006. Religions practiced in Nepal are: Hinduism, Buddhism, Islam, Christianity, Jainism, Sikhism, Bon, ancestor worship and animism. The majority of Nepalis are either Hindus or Buddhism. The two have co-existed in harmony through centuries. Buddha is widely worshipped by both Buddhists and Hindus of Nepal. The five Dhyani Buddhas; Vairochana, Akshobhaya, Rathasambhava, Amitabha and Amoghasiddhi, represent the five basic elements: earth, fire, water, air and ether. Buddhist philosophy conceive...

Increasing Driving Age Limits in Alberta

Increasing Safety by Increasing Age Limits of Drivers Many Albertans and fellow Canadians may agree that driving is an act of responsibility and maturity. Giving out licenses to teenagers, who tend to make risky and thoughtless decisions, is something the country should considered prohibiting. Due to such careless actions, crash rates are much higher for younger drivers than older, more experienced ones. The increase in fatality for teen drivers may be highly influenced by the lack of wearing seat belts, and their tendency to speed more. Not only are they creating a huge risk for themselves, but also for others around them. The driving age limit in Alberta, as well as in Canada, should be raised to eighteen to ensure the safety of other citizens and teens themselves. By decreasing the rate of accidents, preventing recklessness and carelessness on the roads, and lastly ensuring that all laws are obeyed when driving, may be a step towards the right direction of creating a safer community, and more manageable society. To decrease fatality and accident rates in Alberta, the age of obtaining a license should be raised. Service Alberta states, that to begin learning to drive an automobile you must be at least fourteen, while to obtain a license you must be a minimum of sixteen years-old (Driver’s License; Class 5). To save lives, not only in Alberta, but also nation-wide, the government should greatly consider changing this law. According to Daniel R. Mayhew, crash rates tend to decline as age increases (Changes in collision rates among novice drivers during the first months of driving). â€Å"Teen drivers make up about 7 percent of licensed drivers, but they account for 14 percent of the fatalities in accidents† (Teenager Car Accident Statistics). With this knowledge, Albertans should invest more determination in the upbringing of the age limit to cause less worry for their citizens. Some steps have already been taken, such as bringing in a Graduated Driving License program; which requires driver’s to complete many different steps of learning and training, before a full license is received (Teenager Car Accident Statistics). Within a short ten-year span, the nation is able to see that teen crash rates have dropped 7 percent (Teenager Car Accident Statistics). Possibly raising the age at, which teens must be supervised to drive, may also improve their driving skills, and at the same time lead to fewer accidents. Obtaining a license, should become a more in depth, and challenging process to save more lives. Not only do fatality statistics raise awareness to increase the driving age, but also the recklessness and carelessness teens have on the road. Many non-fatal accidents are caused by not paying attention, visual distraction, speeding, failure to recognize hazards and emergency maneuvers (Young novice drivers: careless or clueless? . Due to a combination of these factors, individuals may believe that teens should not be driving at such an early age, because it may make them poor drivers (Is 16 the right age to obtain driver's license? ). Peer pressure among young drivers from fellow passengers may greatly impact driving capability. Being able to take on distractions such as conversations or texting is a skill acquired through multitasking . According to research, multitasking matures deep in the twenties (Is 16 the right age to obtain driver’s license? . Therefore, teens are more subjected to distraction that may occur on the road, which cause many more dangers for those around them. To improve driving conditions among all citizens, mainly teens, Alberta enforced a new distracted driving law. â€Å"Under the new law, drivers will be prohibited from talking, texting or emailing on a hand-held cellphone, using hand-held radio communication devices, using other electronic devices, reading, writing or personal grooming while behind the wheel† (Government of Alberta). Trying to eliminate carelessness and irresponsibility on Alberta roads can be greatly improved through fewer distractions, and a much lesser need to multitask. Besides new laws being placed, government should still consider enforcing an age increase to obtain a driver’s license, to ensure the safety of all. With this in mind, raising the driving age is definitely a step in the right direction, as it can decrease many common broken laws. Not wearing a seatbelt, or careless drunk driving are only a few that are broken every day. Teens may not realize the consequences and costs that every broken law entitles. For simply not wearing a seat belt, a driver can be fined between $200 to $1000, and lose two demerit points; where for a GDL driver only eight are allowed (One person, one seat belt). â€Å"Teens have the lowest rate of seat belt use. According to surveys about 10% of high school students report they do not wear seat belts† (Teen Car Accidents). Novice driver’s immaturity and naiveness not only puts their own lives in danger, but as well as others. While the seat belt law is commonly broken, driving under the influence is more frequent among teenagers. â€Å"60% of all teen deaths in car accidents are alcohol related† (Statistics Teenage Drunk Driving). Much of underage drinking occurs at house parties, hosted by high school students. Feeling confident and in control a teenager might rush into a car, expecting nothing to happen. When in reality the police may stop them, or worse they may land in a fatal crash. â€Å"Social host laws for minors aim to reduce teenage alcohol consumption by imposing liability on adults who host parties† (Angela K. Dills). This is government’s way to prevent adults from supporting underage drinking, which leads to nothing but harm. MADD (Mothers Against Drunk Driving) is also an anti-drinking and driving group, whose mission is to stop impaired driving and to support victims of this violent crime (MADD Canada). Albertans are able to see that teens break laws more readily than older, more experienced driver, which is why the driving age should be raised to a more respectable one. Therefore, a consensus should be made among the nation, to raise the driving age to eighteen. Not only will there be a dramatic decrease in accidents, but also a greater care and sense of responsibility on the roads. Lack of speeding and being more considerate about wearing seat belts, may greatly increase the chances of survival while driving. Not only should personal safety precautions be considered, but also the effects of multitasking. As discovered earlier, multitasking is an acquired skill that develops at an older age, which increases a driver’s safety and compatibility on the roads. More careful driving skills tend to be associated with maturity, which is also tends to be associated with safe alcohol use. Teens don’t consider the consequences and make quick, thoughtless decisions that land many other citizens in harmful places or positions. Raising the age limit to obtain a license could be a step in the right direction of creating a safer society with fewer injuries and fatalities. Work Cited Admin. â€Å"Teenager Car Accident Statistics-What You, As a Parent, Must Know. † Car Accident Injury Claim. N. p. 10 May 2010. Web. 21 November 2011. ; http://www. caraccidentinjuryclaims. org/teenager-car-accident-statistics-what-you-as-a-parent-must-know/; â€Å"Alberta’s distracted driving law comes into effect Sept. . † Government of Alberta: Building a better Alberta. N. p. August 25, 2011. Web. 21 November 2011. ; http://alberta. ca/home/NewsFrame. cfm? ReleaseID=/acn/201108/ 3116101959656-A64D-B176-309E915FDAED40BA. html; Dills Angela K. â€Å"Social host liability for minors and underage drunk-driving accidents. † Journal of Health Economics 29 (2010): 241-249. Academic Search Complete. Web. 21 November 2011 â€Å"Driver’s License. † Government of Alberta: Service Alberta. N. p. n. d. Web. 21 November 2011 ; http://www. servicealberta. gov. ab. ca/Drivers_Licence. fm#Class_5_Licence; Mayhew Daniel R. , Herbert M. Simpson, Anita Pak. â€Å"Changes in collision rates among novice drivers during the first months of driving. † Accident Analysis and Prevention 35 (Spring 2002): 683-691. Academic Search Complete. Web. 21 November 2011. McKnight A. James, A. Scott McKnight. â€Å"Young novice drivers: careless or clueless? † Accident Analysis and Prevention 35 (2003): 921-925. Academic Search Complete. Web. 21 November 2011. â€Å"One person, one seat belt. † Seat Belts: Stay Safe and Secure. Ministry of Transportation. n. d. Web. 21 November 2011. lt; http://www. mto. gov. on. ca/english/safety/seatbelt. shtml; â€Å"Statistics Teenage Drunk Driving. † Learn-About-Alcoholism. com. N. p. n. d We b. 21 November 2011. ; http://www. learn-about-alcoholism. com/statistics-teenage-drunk-driving. html; â€Å"Teen Car Accidents. Teenage Car Crashes. † Teen Car Accidents: Pictures, Statistics ; Stories. N. p. n. d. Web. 21 November 2011. ; http://www. car-â€Å"accidents. com/teen-car-accidents. html; â€Å"What We Do† MADD Canada N. p. n. d. Web. 21 November 2011. ; http://www. madd. ca/madd2/en/about/about_what_we_do. html;

Literature Review How to write

Literature Review How to write BY Ravit*G1 Article 1 : Writing a Literature Review What is a Literature Review? A literature review is a survey and discussion of the literature in a given area of study. It is a concise overview of what has been studied, argued, and established about a topic, and it is usually organized chronologically or thematically. A literature review is written in essay format. It is not an annotated bibliography, because it groups related works together and discusses trends and developments rather than focusing on one item at a time.It is not a summary; rather, it evaluates previous and urrent research in regard to how relevant and/or useful it is and how it relates to your own research. A Literature Review is more than an Annotated Bibliography or a summary, because you are organizing and presenting your sources in terms of their overall relationship to your own project. Purpose A literature review is written to highlight specific arguments and ideas in a field of study. By highlighting these arguments, the writer attempts to show what has been studied in the field, and also where the weaknesses, gaps, or areas needing further study are.The review should therefore also demonstrate to the reader why the riter's research is useful, necessary, important, and valid. Questions a Literature Review Should Answer: Asking questions such as the following will help you sift through your sources and organize your literature review. Remember, the literature review organizes the previous research in the light of what you are planning to do in your own project. What's been done in this topic area to date? What are the significant discoveries, key concepts, arguments, and/or theories that scholars have put forward? Which are the important works?On which particular areas of the topic has previous research oncentrated? Have there been developments over time? What methodologies have been used? Are there any gaps in the research? Are there areas that haven't been looked at closely yet, but which should be? Are there new ways of looking at the topic? Are there improved methodologies for researching this subject? What future directions should research in this subject take? How will your research build on or depart from current and previous research on the topic? What contribution will your research make to the field?Length The length ofa literature review varies depending on its purpose and audience. In a hesis or dissertation, the review is usually a full chapter (at least 20 pages), but for an assignment it may only be a few pages. Structure There are several ways to organize and structure a literature review. Two common ways are chronologically and thematically. Chronological: In a chronological review, you will group and discuss your sources in order of their appearance (usually publication), highlighting the changes in research in the field and your specific topic over time.This method is useful for papers focusing on research metho dology, historiographical papers, and other writing where time becomes an important lement. For example, a literature review on theories of mental illness might present how the understanding of mental illness has changed through the centuries, by giving a series of examples of key developments and ending with current theories and the direction your research will take. Thematic: In a thematic review, you will group and discuss your sources in terms of the themes or topics they cover.This method is often a stronger one organizationally, and it can help you resist the urge to summarize your sources. By grouping themes or topics of research together, you will e able to demonstrate the types of topics that are important to your research. For example, if the topic of the literature review is changes in popular music, then there might be separate sections on research involving the production of music, research on the dissemination of music, research on the interpretation of music, and hist orical studies of popular music.No matter which method you choose, remember: Within each section of a literature review, it is important to discuss how the research relates to other studies (how is it similar or different, what other studies have been done, etc. as well as to demonstrate how it relates to your own work. This is what the review is for: don't leave this connection out! Source : http://www. smu. ca/ administration/library/litrev. html Article 2 : Write a Literature Review 1.Introduction Not to be confused with a book review, a literature review surveys scholarly articles, books and other sources (e. g. dissertations, conference proceedings) relevant to a particular issue, area of research, or theory, providing a description, summary, and critical evaluation of each work. The purpose is to offer an overview of significant literature published on a topic. 2. Components Similar to primary research, development of the literature review requires four stages: Problem formula tion†which topic or field is being examined and what are its component issues?Literature search†finding materials relevant to the subject being explored Data evaluation†determining which literature makes a significant contribution to the understanding of the topic Analysis and interpretation† discussing the findings and conclusions of pertinent literature Literature reviews should comprise the following elements: An overview of the subject, issue or theory under consideration, along with the bjectives of the literature review Division of works under review into categories (e. g. hose in support of a particular position, those against, and those offering alternative theses entirely) Explanation of how each work is similar to and how it varies from the others Conclusions as to which pieces are best considered in their argument, are most convincing of their opinions, and make the greatest contribution to the understanding and development of their area of researc h In assessing each piece, consideration should be given to: Provenance†What are the author's credentials? Are the author's arguments supported by evidence (e. . primary historical material, case studies, narratives, statistics, recent scientific findings)? Objectivity†ls the author's perspective even- handed or prejudicial? Is contrary data considered or is certain pertinent information ignored to prove the author's point? Persuasiveness†Which of the author's theses are most/least convincing? Value†Are the author's arguments and conclusions convincing? Does the work ultimately contribute in any significant way to an understanding of the subject? 3. Definition and Use/PurposeA literature review may constitute an essential chapter of a thesis or dissertation, or may be a self-contained review of writings on a subject. In either case, its purpose is to: Place each work in the context of its contribution to the understanding of the subject under review Describe the relationship of each work to the others under consideration Identify new ways to interpret, and shed light on any gaps in, previous research Resolve conflicts amongst seemingly contradictory previous studies Identify areas of prior scholarship to prevent duplication of effort Point the way forward for further researchPlace one's original work (in the case ot theses or dissertations) in the context ot existing literature The literature review itself, however, does not present new primary scholarship. http://library. ucsc. edu/help/howto/write-a-literature-review What is a review of the literature? A literature review is an account of what has been published on a topic by accredited scholars and researchers. Occasionally you will be asked to write one as a separate assignment (sometimes in the form of an annotated bibliography†see the bottom of the next page), but more often it is part of the introduction to an essay, research eport, or thesis.In writing the literature revie w, your purpose is to convey to your reader what knowledge and ideas have been established on a topic, and what their strengths and weaknesses are. As a piece of writing, the literature review must be defined by a guiding concept (e. g. , your research objective, the problem or issue you are discussing, or your argumentative thesis). It is not Just a descriptive list of the material available, or a set of summaries Besides enlarging your knowledge about the topic, writing a literature review lets you gain and demonstrate skills in two areas 1 . formation seeking: the ability to scan the literature efficiently, using manual or computerized methods, to identify a set of useful articles and books 2. critical appraisal: the ability to apply principles of analysis to identify unbiased and valid studies. A literature review must do these things 1 . be organized around and related directly to the thesis or research question you are developing 2. synthesize results into a summary of what is and is not known 3. identify areas of controversy in the literature 4. ormulate questions that need further research Ask yourself questions like these: . What is the specific thesis, problem, or research question that my literature review helps to define? 2. What type of literature review am I conducting? Am I looking at issues of theory? methodology? policy? quantitative research (e. g. on the effectiveness of a new procedure)? qualitative research (e. g. , studies )? 3. What is the scope of my literature revie w? What types ot publications am I using (e. g. , Journals, books government documents, popular media)?What discipline am I working in (e. g. , nursing psychology, sociology, medicine)? 4. How good was my information seeking? Has my search been wide enough to ensure I've found all the relevant material? Has it been narrow enough to exclude irrelevant material? Is the number of sources I've used appropriate for the length of my paper? 5. Have I critically analysed the litera ture I use? Do I follow through a set of concepts and questions, comparing items to each other in the ways they deal with them?

Acca Notes

S T U D Y T E X T PERFORMANCE MANAGEMENT BPP Learning Media is the sole ACCA Platinum Approved Learning Partner – content for the ACCA qualification.In this, the only Paper F5 study text to be reviewed by the examiner: †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ We discuss the best strategies for studying for ACCA exams We highlight the most important elements in the syllabus and the key skills you will need We signpost how each chapter links to the syllabus and the study guide We provide lots of exam focus points demonstrating what the examiner will want you to do We emphasise key points in regular fast forward summaries We test your knowledge of what you've studied in quick quizzes We examine your understanding in our exam question bank We reference all the important topics in our full indexBPP's i-Pass product also supports this paper. FOR EXAMS IN 2011 First edition 2007 Fourth edition November 2010 ISBN 9780 7517 8921 8 (Previous ISBN 9870 7517 6367 6) British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA www. bpp. com/learningmedia Printed in the United Kingdom We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions.The suggested solutions in the exam answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated. All our rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd.Your learning materials, published by BPP Learning Media Ltd, are printed on paper sourced from sustainable, managed forests.  © BPP Learning Media Ltd 2010 ii Contents Page Introduction Helping you to pass – the O NLY F5 Study Text reviewed by the examiner! Studying F5 The exam paper v vii xi 3 21 33 41 49 63 73 95 123 157 173 199 215 233 267 287 319 337 365 387 403 419 463 Part A Specialist cost and management accounting techniques 2a 2b 2c 2d 2e 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Costing Activity based costing Target costing Lifecycle costing Throughput accounting Environmental accounting Cost volume profit (CVP) analysis Limiting factor analysis Pricing decisions Short-term decisions Risk and uncertainty Objectives of budgetary control Budgetary systems Quantitative analysis in budgeting Budgeting and standard costing Variance analysis Behavioural aspects of standard costing Performance measurement Divisional performance measures Further performance management Part B Decision-making techniques Part C BudgetingPart D Standard costing and variances analysis Part E Performance measurement and control Exam question bank Exam answer bank Index Review form and free prize draw Contents iii A note about copyright Dear Customer What does the little  © mean and why does it matter? Your market-leading BPP books, course materials and e-learning materials do not write and update themselves. People write them: on their own behalf or as employees of an organisation that invests in this activity. Copyright law protects their livelihoods. It does so by creating rights over the use of the content.Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a serious breach of professional ethics. With current technology, things might seem a bit hazy but, basically, without the express permission of BPP Learning Media: †¢ †¢ Photocopying our materials is a breach of copyright Scanning, ripcasting or conversion of our digital materials into different file formats, uploading them to facebook or emailing them to your friends is a breach of copyright You can, of course, sell your books, in the form in which you hav e bought them – once you have finished with them. Is this fair to your fellow students? We update for a reason. ) But the e-products are sold on a single user licence basis: we do not supply ‘unlock’ codes to people who have bought them second-hand. And what about outside the UK? BPP Learning Media strives to make our materials available at prices students can afford by local printing arrangements, pricing policies and partnerships which are clearly listed on our website. A tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting organisations that do.If they act illegally and unethically in one area, can you really trust them? iv Helping you to pass – the ONLY F5 Study Text reviewed by the examiner! BPP Learning Media – the sole Platinum Approved Learning Partner – content As ACCA’s sole Platinum Approved Learning Partner – content, BPP Learning Media gives you the unique o pportunity to use examiner-reviewed study materials for the 2011 exams. By incorporating the examiner’s comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Study Text provides excellent, ACCA-approved support for your studies. NEW FEATURE – the PER alert!Before you can qualify as an ACCA member, you do not only have to pass all your exams but also fulfil a three year practical experience requirement (PER). To help you to recognise areas of the syllabus that you might be able to apply in the workplace to achieve different performance objectives, we have introduced the ‘PER alert’ feature. You will find this feature throughout the Study Text to remind you that what you are learning to pass your ACCA exams is equally useful to the fulfilment of the PER requirement. Tackling studying Studying can be a daunting prospect, particularly when you have lots of other commitments.The different features of the text, the purposes of which are explained fully on the Chapter features page, will help you whilst studying and improve your chances of exam success. Developing exam awareness Our Texts are completely focused on helping you pass your exam. Our advice on Studying F5 outlines the content of the paper, the necessary skills the examiner expects you to demonstrate and any brought forward knowledge you are expected to have. Exam focus points are included within the chapters to highlight when and how specific topics were examined, or how they might be examined in the future.Using the Syllabus and Study Guide You can find the syllabus and Study Guide on page xi of this Study Text Testing what you can do Testing yourself helps you develop the skills you need to pass the exam and also confirms that you can recall what you have learnt. We include Questions – lots of them – both within chapters and in the Exam Question Bank, as well as Quick Quizzes at the end of each chapter to test your knowledge of the chapter content. Introduction v Chapter features Each chapter contains a number of helpful features to guide you through each topic.Topic list Topic list Syllabus reference Tells you what you will be studying in this chapter and the relevant section numbers, together the ACCA syllabus references. Puts the chapter content in the context of the syllabus as a whole. Links the chapter content with ACCA guidance. Highlights how examinable the chapter content is likely to be and the ways in which it could be examined. What you are assumed to know from previous studies/exams. Summarises the content of main chapter headings, allowing you to preview and review each section easily. Demonstrate how to apply key knowledge and techniques.Definitions of important concepts that can often earn you easy marks in exams. Tell you when and how specific topics were examined, or how they may be examined in the future. Formulae that are not given in the exam but which have to be learnt. T his is a new feature that gives you a useful indication of syllabus areas that closely relate to performance objectives in your Practical Experience Requirement (PER). Introduction Study Guide Exam Guide Knowledge brought forward from earlier studies FAST FORWARD Examples Key terms Exam focus points Formula to learn Question Case StudyGive you essential practice of techniques covered in the chapter. Provide real world examples of theories and techniques. Chapter Roundup Quick Quiz Exam Question Bank A full list of the Fast Forwards included in the chapter, providing an easy source of review. A quick test of your knowledge of the main topics in the chapter. Found at the back of the Study Text with more comprehensive chapter questions. Cross referenced for easy navigation. vi Introduction Studying F5 The F5 examiner wants candidates to be able to apply management accounting techniques in business environments.The key question you need to be able to answer is ‘what does it all ac tually mean? ‘ Modern technology is capable of producing vast amounts of management accounting information but it has to be used to help managers to make good decisions and manage effectively. The emphasis in this paper is therefore on practical elements and application to the real world. The examiner does not want to trick you and papers will be fair. The F5 examiner The examiner for this paper is Ann Irons, who replaced Geoff Cordwell from the December 2010 sitting onwards.Ann Irons has written several articles in Student Accountant, including one on how to approach the paper (September 2010 issue). Make sure you read these articles to gain further insight into what the examiner is looking for. Syllabus update The F5 syllabus has been updated for the June 2011 sitting onwards. The full syllabus and study guide can be found in this Study Text on pages xi to xviii. The main changes are the omission of backflush accounting and the inclusion of environmental accounting and cost volume profit (CVP) analysis. The syllabus order has also been changed, which has been reflected in this Study Text.A full summary of the changes to the F5 syllabus is given on the next page.. Introduction vii viii Introduction Introduction ix 1 What F5 is about The aim of this syllabus is to develop knowledge and skills in the application of management accounting techniques. It covers modern techniques, decision making, budgeting and standard costing, concluding with how a business should be managed and controlled. F5 is the middle paper in the management accounting section of the qualification structure. F2 concerns just techniques and P5 thinks strategically and considers environmental factors.F5 requires you to be able to apply techniques and think about their impact on the organisation. 2 What skills are required? †¢ †¢ †¢ †¢ †¢ You are expected to have a core of management accounting knowledge from Paper F2 You will be required to carry out calculation s, with clear workings and a logical structure You will be required to interpret data You will be required to explain management accounting techniques and discuss whether they are appropriate for a particular organisation You must be able to apply your skills in a practical context 3 How to improve your chances of passing †¢ †¢ †¢ †¢ †¢ †¢ †¢ There is no choice in this paper, all questions have to be answered. You must therefore study the entire syllabus, there are no short-cuts Practising questions under timed conditions is essential. BPP's Practice and Revision Kit contains 20 mark questions on all areas of the syllabus Questions will be based on simple scenarios and answers must be focused and specific to the organisation Answer plans will help you to focus on the requirements of the question and enable you to manage your time effectively Answer all parts of the question.Even if you cannot do all of the calculation elements, you will still be ab le to gain marks in the discussion parts Make sure your answers focus on practical applications of management accounting, common sense is essential! Keep an eye out for articles as the examiner will use Student Accountant to communicate with students Read journals etc to pick up on ways in which real organisations apply management accounting and think about your own organisation if that is relevant 4 Brought forward knowledge You will need to have a good working knowledge of basic management accounting from Paper F2.Chapter 1 of this Study Text revises costing and brought forward knowledge is identified throughout the text. If you struggle with the examples and questions used to revise this knowledge, you must go back and revisit your previous work. The examiner will assume you know this material and it may form part of an exam question. x Introduction The exam paper Format of the paper The exam is a three-hour paper containing five compulsory 20 mark questions. You also have 15 min utes for reading and planning. There will be a mixture of calculations and discussion and the examiner's aim is to cover as much of the syllabus as possible.Syllabus and Study Guide The F5 syllabus and study guide can be found on the next page. Introduction xi xii Introduction Introduction xiii xiv Introduction Introduction xv xvi Introduction Introduction xvii xviii Introduction Introduction xix Analysis of past papers The table below provides details of when each element of the syllabus has been examined and the question number in which each element appeared. Further details can be found in the Exam Focus Points in the relevant chapters. Covered in Text chapter June 2010 Dec 2009 June 2009 Pilot PaperSPECIALIST COST AND MANAGEMENT ACCOUNTING TECHNIQUES 2a 2b 2c 2d 2e 3 4 5 6 7 8 9 9 10 8 Activity based costing Target costing Life cycle costing Throughput accounting Environmental accounting DECISION-MAKING TECHNIQUES Cost-volume-profit analysis Multi-limiting factors and the use of linear programming and shadow pricing Pricing decisions Make-or-buy and other short-term decisions Dealing with risk and uncertainty in decision-making BUDGETING Objectives Budgetary systems Types of budget Quantitative analysis in budgeting Behavioural aspects of budgeting STANDARD COSTING AND VARIANCE ANALYSIS 11 12 12 13 13 14 15 16 Budgeting and standard costing Basic variances and operating systems Material mix and yield variances Planning and operational variances Behavioural aspects of standard costing PERFORMANCE MEASUREMENT AND CONTROL The scope of performance measurement Divisional performance and transfer pricing Performance analysis in not-for-profit organisations and the public sector 4 4 2 4 2 2 1 1 3 2 2 5 3 5 3 3 1, 4 4 4 1 1 2 1 xx Introduction Exam formulae Set out below are the formulae you will be given in the exam. If you are not sure what the symbols mean, or how the formulae are used, you should refer to the appropriate chapter in this Study Text. Chapter in Study Text Learning curve Y = axb Where Y a x b LR = cumulative average time per unit to produce x units = the time taken for the first unit of output = the cumulative number of units = the index of learning (log LR/log 2) = the learning rate as a decimal 10 Regression analysis y = a + bx b= a= 10 n ? xy ? ? x ? y n ? x 2 ? (? ) 2 ?y b? x ? n n (n? x 2 ? (? x)2 )(n? y 2 ? (? y)2 ) 5 r= n? xy ? ? x ? y Demand curve P b a = a – bQ = change in price change in quantity = price when Q = 0 MR = a – 2bQ Introduction xxi xxii Introduction P A R T A Specialist cost and management accounting techniques 1 2 Costing Topic list 1 Costing 2 The problem of overheads 3 A revision of absorption costing 4 Overhead absorption 5 Marginal costing 6 Absorption costing and marginal costing compared Introduction Part A of this Study Text looks at specialist cost and management accounting techniques. This chapter serves as a revision of concepts you will have covered in your previous studies.I n the following chapter we will be looking at more complex techniques so it is important that you are familiar with the key concepts and terminology in this chapter. If you want to get free study material of CAT, ACCA, CIMA, CFA, CIA visit : freefor911. wordpress. com 3 Exam guide This chapter serves as an introduction to your study of cost and management accounting techniques, as knowledge is assumed from Paper F2 Management Accounting and is still examinable at this level. Questions in this paper will focus on interpretation rather than doing calculations. 1 Costing FAST FORWARD Costing is the process of determining the costs of products, services or activities.Cost accounting is used to determine the cost of products, jobs or services (whatever the organisation happens to be involved in). Such costs have to be built up using a process known as cost accumulation. In your earlier studies you will have learnt how to accumulate the various cost elements which make up total cost. Abso rption costing cost accumulation system 2 The problem of overheads FAST FORWARD Indirect costs, or overheads, are costs incurred in making a product or providing a service, but which cannot be traced directly to the product or service. Absorption costing is a means of incorporating a fair share of these costs into the cost of a unit of product or service provided.If a company manufactures a product, the cost of the product will include the cost of the raw materials and components used in it and cost of the labour effort required to make it. These are direct costs of the product. The company would, however, incur many other costs in making the product, which are not directly attributable to a single product, but which are incurred generally in the process of manufacturing a large number of product units. These are indirect costs or overheads. Such costs include the following. †¢ †¢ Factory rent and rates Machine depreciation †¢ †¢ Supervision costs Heating and lig hting 4 1: Costing ? Part A Specialist cost and management accounting techniques Key termsA direct cost is a cost that can be traced in full to the product, service or department that is being costed. An indirect cost or overhead is a cost that is incurred in the course of making a product, providing a service or running a department, but which cannot be traced directly and in full to the product, service or department. In some companies, the overheads cost might greatly exceed the direct production costs. It might seem unreasonable to ignore indirect costs entirely when accumulating the costs of making a product, and yet there cannot be a completely satisfactory way of sharing out indirect costs between the many different items of production which benefit from them. 2. Using absorption costing to deal with the problem of overheads Traditionally, the view has been that a fair share of overheads should be added to the cost of units produced. This fair share will include a portion of all production overhead expenditure and possibly administration and marketing overheads too. This is the view embodied in the principles of absorption costing. 2. 1. 1 Theoretical justification for using absorption costing All production overheads are incurred in the production of the organisation's output and so each unit of the product receives some benefit from these costs. Each unit of output should therefore be charged with some of the overhead costs. 2. 1. 2 Practical reasons for using absorption costing (a) Inventory valuations Inventory in hand must be valued for two reasons. i) (ii) For the closing inventory figure in the statement of financial position For the cost of sales figure in the income statement The valuation of inventories will affect profitability during a period because of the way in which the cost of sales is calculated. Cost of goods sold = (b) Pricing decisions Many companies attempt to set selling prices by calculating the full cost of production or sales o f each product, and then adding a margin for profit. ‘Full cost plus pricing' can be particularly useful for companies which do jobbing or contract work, where each job or contract is different, so that a standard unit sales price cannot be fixed. Without using absorption costing, a full cost is difficult to ascertain. c) Establishing the profitability of different products This argument in favour of absorption costing states that if a company sells more than one product, it will be difficult to judge how profitable each individual product is, unless overhead costs are shared on a fair basis and charged to the cost of sales of each product. cost of goods produced + the value of opening inventories – the value of closing inventories 2. 2 Using marginal costing to deal with the problem of overheads For many purposes absorption costing is less useful as a costing method than marginal costing. In some situations, absorption costing can be misleading in the information it su pplies.Advocates of marginal costing take the view that only the variable costs of making and selling a product or service should be identified. Fixed costs should be dealt with separately and treated as a cost of the accounting period rather than shared out somehow between units produced. Some overhead costs are, Part A Specialist cost and management accounting techniques ? 1: Costing 5 however, variable costs which increase as the total level of activity rises and so the marginal cost of production and sales should include an amount for variable overheads. 3 A revision of absorption costing FAST FORWARD Absorption costing is a traditional approach to dealing with overheads, involving three stages: allocation, apportionment and absorption.Apportionment has two stages, general overhead apportionment and service department cost apportionment. Key term Absorption costing is a method of product costing which aims to include in the total cost of a product (unit, job and so on) an approp riate share of an organisation's total overhead, which is generally taken to mean an amount which reflects the amount of time and effort that has gone into producing the product. You should have covered absorption costing in your earlier studies. We will therefore summarise the simpler points of the topic but will go into some detail on the more complex areas to refresh your memory. Knowledge brought forward from earlier studiesAbsorption costing †¢ †¢ Product costs are built up using absorption costing by a process of allocation, apportionment and overhead absorption. Allocation is the process by which whole cost items are charged directly to a cost unit or cost centre. Direct costs are allocated directly to cost units. Overheads clearly identifiable with cost centres are allocated to those cost centres but costs which cannot be identified with one particular cost centre are allocated to general overhead cost centres. The cost of a warehouse security guard would therefore be charged to the warehouse cost centre but heating and lighting costs would be charged to a general overhead cost centre.The first stage of overhead apportionment involves sharing out (or apportioning) the overheads within general overhead cost centres between the other cost centres using a fair basis of apportionment (such as floor area occupied by each cost centre for heating and lighting costs). The second stage of overhead apportionment is to apportion the costs of service cost centres (both directly allocated and apportioned costs) to production cost centres. The final stage in absorption costing is the absorption into product costs (using overhead absorption rates) of the overheads which have been allocated and apportioned to the production cost centres. Costs allocated and apportioned to non-production cost centres are usually deducted from the full cost of production to arrive at the cost of sales. †¢ †¢ †¢ †¢ Question Cost apportionmentBriefly discuss the type of factors which could affect the choice of the bases an organisation can use to apportion service department costs. 6 1: Costing ? Part A Specialist cost and management accounting techniques Answer (a) (b) (c) (d) (e) The type of service being provided The amount of overhead expenditure involved The number of departments benefiting from the service The ability to be able to produce realistic estimates of the usage of the service The resulting costs and benefits Question More cost apportionment A company is preparing its production overhead budgets and determining the apportionment of those overheads to products. Cost centre expenses and related information have been budgeted as follows.Total $ 78,560 16,900 16,700 2,400 8,600 3,400 40,200 402,000 100 35,000 25,200 45,000 Machine shop A $ 8,586 6,400 Machine shop B $ 9,190 8,700 Assembly $ 15,674 1,200 Canteen $ 29,650 600 Maintenance $ 15,460 – Indirect wages Consumable materials Rent and rates Buildings insurance P ower Heat and light Depreciation (machinery) Value of machinery Power usage (%) Direct labour (hours) Machine usage (hours) Area (sq ft) Required 201,000 55 8,000 7,200 10,000 179,000 40 6,200 18,000 12,000 22,000 3 20,800 – 15,000 – – – – 6,000 – 2 – – 2,000 Using the direct apportionment to production departments method and bases of apportionment which you consider most appropriate from the information provided, calculate overhead totals for the three production departments. AnswerTotal $ Indirect wages 78,560 Consumable materials 16,900 Rent and rates 16,700 Insurance 2,400 8,600 Power Heat and light 3,400 Depreciation 40,200 166,760 Reallocate – Reallocate – Totals 166,760 A $ 8,586 6,400 3,711 533 4,730 756 20,100 44,816 7,600 4,752 57,168 B $ 9,190 8,700 4,453 640 3,440 907 17,900 45,230 5,890 11,880 63,000 Assembly $ 15,674 1,200 5,567 800 258 1,133 2,200 26,832 19,760 – 46,592 MainCanteen tenance $ $ 29,650 15,460 600 – 2,227 742 320 107 – 172 453 151 – – 33,250 16,632 (33,250) – – (16,632) – – Basis of apportionment Actual Actual Area Area Usage Area Val of mach Direct labour Mach usage Part A Specialist cost and management accounting techniques ? 1: Costing 7 4 Overhead absorption FAST FORWARDAfter apportionment, overheads are absorbed into products using an appropriate absorption rate based on budgeted costs and budgeted activity levels. Having allocated and/or apportioned all overheads, the next stage in absorption costing is to add them to, or absorb them into, the cost of production or sales. 4. 1 Use of a predetermined absorption rate Knowledge brought forward from earlier studies Step 1 Step 2 Step 3 The overhead likely to be incurred during the coming year is estimated. The total hours, units or direct costs on which the overhead absorption rates are based (activity levels) are estimated. Absorption rate = estima ted overhead ? budgeted activity level 4. 2 Choosing the appropriate absorption base Question Absorption basesList as many possible bases of absorption (or ‘overhead recovery rates') as you can think of. Answer (a) (b) (c) (d) (e) (f) (g) (h) A percentage of direct materials cost A percentage of direct labour cost A percentage of prime cost A percentage of factory cost (for administration overhead) A percentage of sales or factory cost (for selling and distribution overhead) A rate per machine hour A rate per direct labour hour A rate per unit The choice of an absorption basis is a matter of judgement and common sense. There are no strict rules or formulae involved. But the basis should realistically reflect the characteristics of a given cost centre, avoid undue anomalies and be ‘fair'.The choice will be significant in determining the cost of individual products, but the total cost of production overheads is the budgeted overhead expenditure, no matter what basis of abs orption is selected. It is the relative share of overhead costs borne by individual products and jobs which is affected. Question Absorption rates Using the information in and the results of the question on page 7, determine budgeted overhead absorption rates for each of the production departments using appropriate bases of absorption. 8 1: Costing ? Part A Specialist cost and management accounting techniques Answer Machine shop A: Machine shop B: Assembly: $57,168/7,200 = $7. 94 per machine hour $63,000/18,000 = $3. 50 per machine hour $46,592/20,800 = $2. 24 per direct labour hour 4. 3 Over and under absorption of overheads FAST FORWARDUnder-/over-absorbed overhead occurs when overheads incurred do not equal overheads absorbed. The rate of overhead absorption is based on estimates (of both numerator and denominator) and it is quite likely that either one or both of the estimates will not agree with what actually occurs. Actual overheads incurred will probably be either greater tha n or less than overheads absorbed into the cost of production, and so it is almost inevitable that at the end of the accounting year there will have been an over absorption or under absorption of the overhead actually incurred. †¢ †¢ Over absorption means that the overheads charged to the cost of sales are greater than the overheads actually incurred.Under absorption means that insufficient overheads have been included in the cost of sales. Suppose that the budgeted overhead in a production department is $80,000 and the budgeted activity is 40,000 direct labour hours, the overhead recovery rate (using a direct labour hour basis) would be $2 per direct labour hour. Actual overheads in the period are, say $84,000 and 45,000 direct labour hours are worked. $ Overhead incurred (actual) 84,000 90,000 Overhead absorbed (45,000 ? $2) Over-absorption of overhead 6,000 In this example, the cost of production has been charged with $6,000 more than was actually spent and so the cost that is recorded will be too high.The over-absorbed overhead will be an adjustment to the profit and loss account at the end of the accounting period to reconcile the overheads charged to the actual overhead. Question Under and over-absorption The total production overhead expenditure of the company in the questions above was $176,533 and its actual activity was as follows. Machine shop A Machine shop B Assembly Direct labour hours 8,200 6,500 21,900 Machine usage hours 7,300 18,700 – Required Using the information in and results of the previous questions, calculate the under- or over-absorption of overheads. Answer $ Actual expenditure Overhead absorbed Machine shop A Machine shop B Assembly $ 176,533 ,300 hrs ? $7. 94 18,700 hrs ? $3. 50 21,900 hrs ? $2. 24 57,962 65,450 49,056 172,468 4,065 Under-absorbed overhead Part A Specialist cost and management accounting techniques ? 1: Costing 9 4. 4 The reasons for under-/over-absorbed overhead The overhead absorption rate is pre determined from budget estimates of overhead cost and activity level. Under or over recovery of overhead will occur in the following circumstances. †¢ †¢ †¢ Actual overhead costs are different from budgeted overheads. The actual activity level is different from the budgeted activity level. Actual overhead costs and actual activity level differ from those budgeted. QuestionOver and under-absorption Elsewhere has a budgeted production overhead of $180,000 and a budgeted activity of 45,000 machine hours. Required Calculate the under-/over-absorbed overhead, and note the reasons for the under-/over-absorption in the following circumstances. (a) (b) (c) Actual overheads cost $170,000 and 45,000 machine hours were worked. Actual overheads cost $180,000 and 40,000 machine hours were worked. Actual overheads cost $170,000 and 40,000 machine hours were worked. Answer The overhead recovery rate is $180,000/45,000 = $4 per machine hour. (a) Actual overhead Absorbed overhead (45, 000 ? $4) Over-absorbed overhead $ 170,000 180,000 10,000Reason: Actual and budgeted machine hours are the same but actual overheads cost less than expected. (b) Actual overhead Absorbed overhead (40,000 ? $4) Under-absorbed overhead $ 180,000 160,000 20,000 Reason: Budgeted and actual overhead costs were the same but fewer machine hours were worked than expected. $ (c) Actual overhead 170,000 160,000 Absorbed overhead (40,000 ? $4) Under-absorbed overhead 10,000 Reason: A combination of the reasons in (a) and (b). 10 1: Costing ? Part A Specialist cost and management accounting techniques 5 Marginal costing FAST FORWARD In marginal costing, inventories are valued at variable production cost whereas in absorption costing they are valued at their full production cost.Marginal cost is the cost of one unit of a product/service which could be avoided if that unit were not produced/provided. Contribution is the difference between sales revenue and variable (marginal) cost of sales. Margi nal costing is an alternative to absorption costing. Only variable costs (marginal costs) are charged as a cost of sales. Fixed costs are treated as period costs and are charged in full against the profit of the period in which they are incurred. Knowledge brought forward from earlier studies Key terms Marginal costing †¢ In marginal costing, closing inventories are valued at marginal (variable) production cost whereas, in absorption costing, inventories are valued at their full production cost which includes absorbed fixed production overhead.If the opening and closing inventory levels differ, the profit reported for the accounting period under the two methods of cost accumulation will therefore be different. But in the long run, total profit for a company will be the same whichever is used because, in the long run, total costs will be the same by either method of accounting. Different accounting conventions merely affect the profit of individual periods. †¢ †¢ Quest ion Absorption and marginal costing A company makes and sells a single product. At the beginning of period 1, there are no opening inventories of the product, for which the variable production cost is $4 and the sales price $6 per unit.Fixed costs are $2,000 per period, of which $1,500 are fixed production costs. Normal output is 1,500 units per period. In period 1, sales were 1,200 units, production was 1,500 units. In period 2, sales were 1,700 units, production was 1,400 units. Required Prepare profit statements for each period and for the two periods in total using both absorption costing and marginal costing. Answer It is important to notice that although production and sales volumes in each period are different, over the full period, total production equals sales volume. The total cost of sales is the same and therefore the total profit is the same by either method of accounting.Differences in profit in any one period are merely timing differences which cancel out over a longe r period of time. Part A Specialist cost and management accounting techniques ? 1: Costing 11 (a) Absorption costing. The absorption rate for fixed production overhead is $1,500/1,500 units = $1 per unit. The fully absorbed cost per unit = $(4+1) = $5. $ Sales Production costs Variable Fixed Add opening inventory b/f Less closing inventory c/f Production cost of sales Under-absorbed o/hd Total costs Gross profit Other costs Net profit (300? $5) (300? $5) Period 1 $ 7,200 $ Period 2 $ 10,200 Total $ $ 17,400 6,000 1,500 7,500 – 7,500 1,500 6,000 – 6,000 1,200 (500) 700 5,600 1,400 7,000 1,500 8,500 – 8,500 100 8,600 1,600 (500) 1,100 1,600 2,900 14,500 1,500 16,000 1,500 14,500 100 14,600 2,800 (1,000) 1,800 (b) Marginal costing The marginal cost per unit = $4. Sales Variable production cost Add opening inventory b/f Less closing inventory c/f Variable prod. cost of sales Contribution Fixed costs Profit Period 1 $ 7,200 6,000 – 6,000 1,200 4,800 2,400 2,00 0 400 $ Period 2 $ 10,200 5,600 1,200 6,800 – 6,800 3,400 2,000 1,400 $ Total $ 11,600 1,200 12,800 1,200 11,600 5,800 4,000 1,800 $ 17,400 (300? $4) (300? $4) Question Direct labour Direct materials Production overhead Standard production cost per unit 3 hours at $6 per hour 4 kilograms at $7 per kg Variable Fixed Marginal and absorption costing $ 18 28 3 20 69RH makes and sells one product, which has the following standard production cost. Normal output is 16,000 units per annum. Variable selling, distribution and administration costs are 20 per cent of sales value. Fixed selling, distribution and administration costs are $180,000 per annum. There are no units in finished goods inventory at 1 October 20X2. The fixed overhead expenditure is spread evenly throughout the year. The selling price per unit is $140. Production and sales budgets are as follows. Six months ending Six months ending 31 March 20X3 30 September 20X3 Production 8,500 7,000 Sales 7,000 8,000 12 1: Costing ? Part A Specialist cost and management accounting techniquesRequired Prepare profit statements for each of the six-monthly periods, using the following methods of costing. (a) (b) Marginal costing Absorption costing Answer (a) Profit statements for the year ending 30 September 20X3 Marginal costing basis Six months ending 31 March 20X3 $'000 $'000 Sales at $140 per unit 980 Opening inventory – Std. variable prod. cost (at $49 per unit) 416. 5 416. 5 Closing inventory (W1) 73. 5 343 637 Variable selling and so on costs 196 Contribution 441 Fixed costs: production (W2) 160 selling and so on 90 250 Net profit 191 Profit statements for the year ending 30 September 20X3 Absorption costing basis Six months ending 31 March 20X3 $'000 $'000 Sales at $140 per unit 980 Opening inventory – Std. cost of prod. at $69 per unit) Closing inventory (W1) (Over-)/under-absorbed overhead (W3) Gross profit Selling and so on costs Variable Fixed Net profit 586. 5 586. 5 103. 5 483. 0 (10. 0) 473 507 196 90 286 221 224 90 314 234 Six months ending 30 September 20X3 $'000 $'000 1,120 73. 5 343. 0 416. 5 24. 5 392 728 224 504 160 90 250 254 (b) Six months ending 30 September 20X3 $'000 $'000 1,120 103. 5 483. 0 586. 5 34. 5 552. 0 20. 0 572 548 Part A Specialist cost and management accounting techniques ? 1: Costing 13 Workings 1 Opening inventory Production Sales Closing inventory Marginal cost valuation (? $49) Absorption cost valuation (? $69) 2 3 Normal output (16,000 ? 2) Budgeted output Difference ? std. ixed prod. o/hd per unit (Over-)/under-absorbed overhead Six months ending 31 March 20X3 Units – 8,500 8,500 7,000 1,500 $73,500 $103,500 Six months ending 30 September 20X3 Units 1,500 7,000 8,500 8,000 500 $24,500 $34,500 Budgeted fixed production o/hd = 16,000 units ? $20 = $320,000 pa = $160,000 per six months Six months ending 31 March 20X3 8,000 units units 8,500 500 units ? $20 ($10,000) Six months ending 30 September 20X3 8,000 units 7,000 units 1, 000 units ? $20 $20,000 6 Absorption costing and marginal costing compared FAST FORWARD If opening and closing inventory levels differ profit reported under the two methods will be different.In the long run, total profit will be the same whatever method is used. 6. 1 Reconciling the profit figures given by the two methods The difference in profits reported under the two costing systems is due to the different inventory valuation methods used. (a) If inventory levels increase between the beginning and end of a period, absorption costing will report the higher profit because some of the fixed production overhead incurred during the period will be carried forward in closing inventory (which reduces cost of sales) to be set against sales revenue in the following period instead of being written off in full against profit in the period concerned.If inventory levels decrease, absorption costing will report the lower profit because as well as the fixed overhead incurred, fixed production ov erhead which had been carried forward in opening inventory is released and is also included in cost of sales. (b) 6. 2 Example: Reconciling profits The profits reported for period 1 in the question on page 11 would be reconciled as follows. Marginal costing profit Adjust for fixed overhead in inventory (inventory increase of 300 units ? $1 per unit) Absorption costing profit $ 400 300 700 Exam focus point Remember that if opening inventory values are greater than closing inventory values, marginal costing shows the greater profit. 14 1: Costing ?Part A Specialist cost and management accounting techniques 6. 3 Marginal versus absorption costing: reporting to management FAST FORWARD Marginal costing is more useful for decision-making purposes, but absorption costing is needed for financial reporting purposes to comply with accounting standards. We know that the reported profit in any period is likely to differ according to the costing method used, but does one method provide a more re liable guide to management about the organisation's profit position? With marginal costing, contribution varies in direct proportion to the volume of units sold. Profits will increase as sales volume rises, by the amount of extra contribution earned.Since fixed cost expenditure does not alter, marginal costing gives an accurate picture of how a firm's cash flows and profits are affected by changes in sales volumes. With absorption costing, in contrast, there is no clear relationship between profit and sales volume, and as sales volume rises the total profit will rise by the sum of the gross profit per unit plus the amount of overhead absorbed per unit. Arguably this is a confusing and unsatisfactory method of monitoring profitability. If sales volumes are the same from period to period, marginal costing reports the same profit each period (given no change in prices or costs). In contrast, using absorption costing, profits can vary with the volume of production, even when the volume of sales is constant.Using absorption costing there is therefore the possibility of manipulating profit, simply by changing output and inventory levels. 6. 4 Example: Manipulating profits Gloom Co budgeted to make and sell 10,000 units of its product in 20X1. The selling price is $10 per unit and the variable cost $4 per unit. Fixed production costs were budgeted at $50,000 for the year. The company uses absorption costing and budgeted an absorption rate of $5 per unit. During 20X1, it became apparent that sales demand would only be 8,000 units. The management, concerned about the apparent effect of the low volume of sales on profits, decided to increase production for the year to 15,000 units.Actual fixed costs were still expected to be $50,000 in spite of the significant increase in production volume. Required Calculate the profit at an actual sales volume of 8,000 units, using the following methods. (a) (b) Absorption costing Marginal costing Explain the difference in profits cal culated. Solution (a) Absorption costing Sales (8,000 ? $10) Cost of production (15,000 ? $9) Less: over-absorbed overhead (5,000 ? $5) $ 135,000 (25,000) (110,000) (30,000) 63,000 33,000 $ 80,000 Closing inventory (7,000 ? $9) Profit Part A Specialist cost and management accounting techniques ? 1: Costing 15 (b) Marginal costing Sales Cost of sales Cost of production (15,000 ? $4) Closing inventory (7,000 ? $4) Contribution Fixed costs Loss $ $ 80,000 0,000 ((28,000) 32,000 48,000 50,000 (2,000) The difference in profits of $35,000 is explained by the difference in the increase in inventory values (7,000 units ? $5 of fixed overhead per unit). With absorption costing, the expected profit will be higher than the original budget of $10,000 (10,000 units ? ($10 – 9)) simply because $35,000 of fixed overheads will be carried forward in closing inventory values. By producing to absorb overhead rather than to satisfy customers, inventory levels will, of course, increase. Unless th is inventory is sold, however, there may come a point when production has to stop and the inventory has to be sold off at lower prices.Marginal costing would report a contribution of $6 per unit, or $48,000 in total for 8,000 units, which fails to cover the fixed costs of $50,000 by $2,000. The argument above is not conclusive, however, because marginal costing is not so useful when sales fluctuate from month to month because of seasonal variations in sales demand, but production per month is held constant in order to arrange for an even flow of output (and thereby prevent the cost of idle resources in periods of low demand and overtime in periods of high demand). Question Absorption v marginal costing A clothing manufacturer makes a specific brand of jeans which it sells at a standard price of $100 per pair. The manufacturer’s costs are as follows.Standard variable production cost: $16 per pair Total fixed production cost per month: $240,000 (10,000 pairs are planned to be p roduced per month) Total fixed non-production costs: $300,000 per month In Month 1, when the opening inventory is 1,000 pairs, production of 10,000 pairs is planned and sales of 8,000 pairs are expected. In Month 2, sales are planned to be 9,000 pairs and production is still 10,000 pairs. Required (a) What would be the net profit for Months 1 and 2 under (i) (ii) (b) Absorption costing Marginal costing What comments could you make about the performance of this business? 16 1: Costing ? Part A Specialist cost and management accounting techniques Answer (a) Absorption standard cost per unit = $16 + 240,000/10,000 = $40 Absorption costing Month 1 Month 2 $’000 $’000 $’000 $’000 800 900 Marginal costing Month 1 Month 2 $’000 $’000 $’000 $’000 800 900Sales 8,000 @$100 Cost of sales Opening inventory (1,000 @ $40) Production (10,000 @ $40) Less: closing inventory* (3,000 @ $40) Gross profit Contribution Less other costs Fixed product ion Fixed non-production 40 400 (120) (320) 480 120 400 (160) (360) 540 1,000 @ $16 10,000 @ $16 3,000 @ $16 16 160 (48) (128) 672 (240) (300) 48 160 (64) (144) 756 (240) (300) (300) 180 (300) 240 (540) 132 (540) 216 * Closing inventory = 1,000 + 10,000 – 8,000 (b) The absorption costing net profit is higher than the marginal costing net profit in both months because inventories are rising. Under absorption costing, where inventories are increasing, a greater amount of the fixed production cost is carried forward n the closing inventory valuation than was brought forward in the opening inventory valuation. This means that the impact of these costs on profit is delayed under absorption costing. Under marginal costing, the full impact of the fixed production costs on profit is immediate. The business is profitable and sales have increased. However, a build up of inventories in the clothing manufacturing industry is unwise as demand is subject to tastes and fashion. The business needs to respond rapidly to changes in demand or it will become rapidly uncompetitive. Part A Specialist cost and management accounting techniques ? 1: Costing 17 Chapter Roundup †¢ †¢ Costing is the process of determining the costs of products, services or activities.Indirect costs, or overheads, are costs incurred in making a product or providing a service, but which cannot be traced directly to the product or service. Absorption costing is a means of incorporating a fair share of these costs into the cost of a unit of product or service provided. Absorption costing is a traditional approach to dealing with overheads, involving three stages: allocation, apportionment and absorption. Apportionment has two stages, general overhead apportionment and service department cost apportionment. After apportionment, overheads are absorbed into products using an appropriate absorption rate based on budgeted costs and budgeted activity levels. Under-/over-absorbed overhead occurs wh en overheads incurred do not equal overheads absorbed.In marginal costing, inventories are valued at variable production cost whereas in absorption costing they are valued at their full production cost. If opening and closing inventory levels differ profit reported under the two methods will be different. In the long run, total profit will be the same whatever method is used. †¢ Marginal costing is more useful for decision-making purposes, but absorption costing is needed for financial reporting purposes to comply with accounting standards. †¢ †¢ †¢ †¢ †¢ †¢ 18 1: Costing ? Part A Specialist cost and management accounting techniques Quick Quiz 1 Here are some terms you should have encountered in your earlier studies. Match the term to the definition.Terms Direct cost Prime cost Overhead Classification by function Fixed cost Variable cost Product cost Avoidable cost Controllable cost Relevant cost Cost centre Cost unit (b) (c) (d) (e) (f) (g) (h) (i ) (j) (k) (l) 2 3 Definitions (a) Specific costs of, say, an activity, which would not be incurred if the activity did not exist Total of direct costs Future cash flow which will be changed as the result of a decision Product produced by an organisation Dividing costs into production, administration, selling and distribution, research and development and financing costs Cost that can be traced in full to whatever is being costed Organisation's departments A cost that varies with the level of output A cost that is incurred in the course of making a product but which cannot be traced directly and in full to the product Cost that is incurred for a particular period of time and which, within certain activity levels, is unaffected by changes in the level of activity Cost identified with goods produced or purchased for resale and initially included in the value of inventory Cost which can be influenced by management decisions and actions †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢ € ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ is the process of determining the costs of products, activities or services. How is an overhead absorption rate calculated? A B C D Estimated overhead ? actual activity level Estimated overhead ? budgeted activity level Actual overhead ? actual activity level Actual overhead ? budgeted activity level 4 Over absorption means that the overheads charged to the cost of sales are greater than the overheads actually incurred. True False 5Fill in the blanks in the statements about marginal costing and absorption costing below. (a) (b) If inventory levels †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ between the beginning and end of a period, absorption costing will report the higher profit. If inventory levels decrease, †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ costing will report the lower profit. 6 Fill in the following blanks with either ‘marginal' or ‘absorption'. (a) (b) (c) (d) (e) Using †¦Ã¢â‚ ¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ costing, profits can be manipulated simply by changing output and inventory levels. Fixed costs are charged in full against the profit of the period in which they are incurred when †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ costing is used. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ costing fails to recognise the importance of working to full capacity. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ costing could be argued to be preferable to †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ costing in management accounting in order to be consistent with the requirements of accounting standards. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ costing should not be used when decision-making information is required. Part A Specialist cost and management accounting techniques ? 1: Costing 19 Answers to Quick Quiz 1 Direct cost Prime cost Overhead Classification by function Fixed co st Variable cost Product cost Avoidable cost Controllable cost Relevant cost Cost centre Cost unit Costing B True (a) (b) (a) (b) (c) (d) (e) Increase Absorption absorption marginal marginal absorption, marginal absorption (f) (b) (i) (e) (j) (h) (k) (a) (l) (c) (g) (d) 2 3 4 5 6 Now try the questions below from the Exam Question Bank Number Q1Level Introductory Marks 10 Time 18 mins 20 1: Costing ? Part A Specialist cost and management accounting techniques Activity based costing Topic list 1 Activity based costing 2 Absorption costing versus ABC 3 Merits and criticisms of ABC Syllabus reference A1 (a), (b) A1 (c) A1 (c) Introduction Chapter 2 covers Part A of the syllabus, specialist cost and management accounting techniques. It has been divided into five sub-chapters to reflect the examiner's emphasis that all five techniques are equally important and equally examinable. In this chapter we will be looking at the first alternative method of cost accumulation, activity based costin g (ABC).ABC is a modern alternative to absorption costing which attempts to overcome the problems of costing in a modern manufacturing environment. If you want to get free study material of CAT, ACCA, CIMA, CFA, CIA visit : freefor911. wordpress. com 21 Study guide Intellectual level A1 (a) (b) (c) Activity based costing Identify appropriate cost drivers under ABC Calculate costs per driver and per unit using ABC Compare ABC and traditional methods of overhead absorption based on production units, labour hours or machine hours 1 2 2 Exam guide There was a question on ABC in the Pilot Paper for F5. It was also examined in June 2008 and June 2010 and is therefore a crucial topic to understand. 1 Activity based costing FAST FORWARD /08, 6/10 An alternative to absorption costing is activity based costing (ABC). ABC involves the identification of the factors (cost drivers) which cause the costs of an organisation's major activities. Support overheads are charged to products on the basis of their usage of an activity. †¢ †¢ For costs that vary with production level in the short term, the cost driver will be volume related (labour or machine hours). Overheads that vary with some other activity (and not volume of production) should be traced to products using transaction-based cost drivers such as production runs or number of orders received. 1. 1 Reasons for the development of ABCThe traditional cost accumulation system of absorption costing was developed in a time when most organisations produced only a narrow range of products (so that products underwent similar operations and consumed similar proportions of overheads). And overhead costs were only a very small fraction of total costs, direct labour and direct material costs accounting for the largest proportion of the costs. The benefits of more accurate systems for overhead allocation would probably have been relatively small. In addition, information processing costs were high. In recent years, however , there has been a dramatic fall in the costs of processing information.And, with the advent of advanced manufacturing technology (AMT), overheads are likely to be far more important and in fact direct labour may account for as little as 5% of a product's cost. It therefore now appears difficult to justify the use of direct labour or direct material as the basis for absorbing overheads or to believe that errors made in attributing overheads will not be significant. Many resources are used in non-volume related support activities, (which have increased due to AMT) such as setting-up, production scheduling, inspection and data processing. These support activities assist the efficient manufacture of a wide range of products and are not, in general, affected by changes in production volume.They tend to vary in the long term according to the range and complexity of the products manufactured rather than the volume of output. The wider the range and the more complex the products, the more support services will be required. Consider, for example, factory X which produces 10,000 units of one product, the Alpha, and factory Y which produces 1,000 units each of ten slightly different versions of the Alpha. Support activity costs in the factory Y are likely to be a lot higher than in factory X but the factories produce an identical number of units. For example, factory X will only need to set-up once whereas Factory Y will have to set-up the 22 2a: Activity based costing ?Part A Specialist cost and management accounting techniques production run at least ten times for the ten different products. Factory Y will therefore incur more set-up costs for the same volume of production. Traditional costing systems, which assume that all products consume all resources in proportion to their production volumes, tend to allocate too great a proportion of overheads to high volume products (which cause relatively little diversity and hence use fewer support services) and too small a pr oportion of overheads to low volume products (which cause greater diversity and therefore use more support services). Activity based costing (ABC) attempts to overcome this problem. 1. Definition of ABC Key term Activity based costing (ABC) involves the identification of the factors which cause the costs of an organisation's major activities. Support overheads are charged to products on the basis of their usage of the factor causing the overheads. The major ideas behind activity based costing are as follows. (a) (b) (c) Activities cause costs. Activities include ordering, materials handling, machining, assembly, production scheduling and despatching. Producing products creates demand for the activities. Costs are assigned to a product on the basis of the product's consumption of the activities. 1. 3 Outline of an ABC systemAn ABC system operates as follows. Step 1 Step 2 Key term Identify an organisation's major activities. Identify the factors which determine the size of the costs of an activity/cause the costs of an activity. These are known as cost drivers. A cost driver is a factor which causes a change in the cost of an activity. Look at the following examples. Costs Ordering costs Materials handling costs Production scheduling costs Despatching costs Possible cost driver Number of orders Number of production runs Number of production runs Number of despatches Step 3 Step 4 Collect the costs associated with each cost driver into what are known as cost pools.Charge costs to products on the basis of their usage of the activity. A product's usage of an activity is measured by the number of the activity's cost driver it generates. Question Which of the following definitions best describes a cost driver? A B C D Any activity which causes an increase in costs A collection of costs associated with a particular activity A cost that varies with production levels Any factor which causes a change in the cost of an activity Cost driver Part A Specialist cost and mana gement accounting techniques ? 2a: Activity based costing 23 Answer D Any factor which causes a change in the cost of an activity. Exam focus pointABC is a popular exam topic. Questions on activity based costing often require a comparison with more traditional methods. The implications for the business of each approach is often required. 2 Absorption costing versus ABC 6/08, 6/10 The following example illustrates the point that traditional cost accounting techniques result in a misleading and inequitable division of costs between low-volume and high-volume products, and that ABC can provide a more meaningful allocation of costs. 2. 1 Example: Activity based costing Suppose that Cooplan manufactures four products, W, X, Y and Z. Output and cost data for the period just ended are as follows.Number of production runs in the Material cost Direct labour Machine Output units period per unit hours per unit hours per unit $ W 10 2 20 1 1 X 10 2 80 3 3 Y 100 5 20 1 1 80 3 3 Z 100 5 14 Direct labour cost per hour $5 Overhead costs Short run variable costs Set-up costs Expediting and scheduling costs Materials handling costs Required Prepare unit costs for each product using conventional costing and ABC. $ 3,080 10,920 9,100 7,700 30,800 Solution Using a conventional absorption costing approach and an absorption rate for overheads based on either direct labour hours or machine hours, the product costs would be as follows. W $ 200 50 700 950 10 $95 X $ 800 150 2,100 3,050 10 $305 Y $ 2,000 500 7,000 9,500 100 $95 Z $ 8,000 1,500 21,000 30,500 100 $305 Total $ Direct material Direct labour Overheads * Units produced Cost per unit 4,000 * $30,800 ? 440 hours = $70 per direct labour or machine hour. 24 2a: Activity based costing ? Part A Specialist cost and management accounting techniques Using activity based costing and assuming that the number of production runs is the cost driver for setup costs, expediting and scheduling costs and materials handling costs and that machi ne hours are the cost driver for short-run variable costs, unit costs would be as follows. W $ 200 50 70 1,560 1,300 1,100 4,280 10 $428 X $ 800 150 210 1,560 1,300 1,100 5,120 10 $512 Y $ 2,000 500 700 3,900 3,250 2,750 13,100 100 $131 Z $ 8,000 1,500 2,100 3,900 3,250 2,750 21,500 100 $215 Total $Direct material Direct labour Short-run variable overheads (W1) Set-up costs (W2) Expediting, scheduling costs (W3) Materials handling costs (W4) Units produced Cost per unit Workings 1 2 3 4 $3,080 ? 440 machine hours = $10,920 ? 14 production runs = $9,100 ? 14 production runs = $7,700 ? 14 production runs = Conventional costing unit cost $ 95 305 95 305 44,000 $7 per machine hour $780 per run $650 per run $550 per run ABC unit cost $ 428 512 131 215 Difference per unit $ + 333 + 207 + 36 – 90 Difference in total $ +3,330 +2,070 +3,600 –9,000 Summary Product W X Y Z (a) (b) The figures suggest that the traditional volume-based absorption costing system is flawed.It underal locates overhead costs to low-volume products (here, W and X) and over-allocates overheads to higher-volume products (here Z in particular). It underallocates overhead costs to smaller-sized products (here W and Y with just one hour of work needed per unit) and over allocates overheads to larger products (here X and particularly Z). 2. 2 ABC versus traditional costing methods Both traditional absorption costing and ABC systems adopt the two stage allocation process. 2. 2. 1 Allocation of overheads ABC establishes separate cost pools for support activities such as despatching. As the costs of these activities are assigned directly to products through cost driver rates, reapportionment of service department costs is avoided. 2. 2. Absorption of overheads The principal difference between the two systems is the way in which overheads are absorbed into products. (a) (b) Absorption costing most commonly uses two absorption bases (labour hours and/or machine hours) to charge overheads to p roducts. ABC uses many cost drivers as absorption bases (eg number of orders or despatches). Absorption rates under ABC should therefore be more closely linked to the causes of overhead costs. Part A Specialist cost and management accounting techniques ? 2a: Activity based costing 25 2. 3 Cost drivers The principal idea of ABC is to focus attention on what causes costs to increase, ie the cost drivers. a) The costs that vary with production volume, such as power costs, should be traced to products using production volume-related cost drivers, such as direct labour hours or direct machine hours. Overheads which do not vary with output but with some other activity should be traced to products using transaction-based cost drivers, such as number of production runs and number of orders received. (b) Traditional costing