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

Marketing in the Wine Industry Essay

There’s more in a glass of wine than meets the eye, or the palate. Wine isn’t just for the rich and affluent anymore. Everyone can enjoy wine, whether it’s a five dollar bottle or a five hundred dollar bottle. Winemakers and wine distribution companies have come up with new and exciting way to market their wines to people of every tax bracket and all walks of life. (Manda) Marketing in the wine industry is changing. Traditionally, consumers looked to opinion leaders like Robert Parker and the Wine Spectator to find the best wines on the market. While those methods are still effective, winemakers and wine enthusiasts have discovered a new way to spread the word about particular wines. Social media has become the new, hot trend in marketing in just about every industry out there right now. And the wine industry is no exception. Corkd. com is a website for wine drinkers and enthusiasts where users can create their own wine journal, wine cellar, shopping list, and connect with online drinking buddies. This website is one way the wine industry as stepped up to the plate and utilized the opportunities of the internet in marketing. â€Å"Cork’d is your pulse on the wine world and an online playground for all things wine. By collaborating with some of the smartest wine drinkers and industry figures, Cork’d is providing you with the most comprehensive, fun and exciting wine content available. Whether you’re a winery looking for exposure or an events company looking to promote or host a tasting, Cork’d wants to talk to you. Our mission is to breakdown the stereotypes, myths and pretenses surrounding wine culture to help you discover and drink better wines. † (corkd. com) Another factor changing the wine industries marketing strategies is where consumers are buying wine. Chain stores and supermarkets have taken over wine distribution from wholesalers. Costco has become one of the largest wine retailers in the United States. According to Michael Roberto, â€Å"There’s no question that a seismic shift is occurring at the retail and wholesale level. The number of alcoholic beverage wholesalers in the U. S. has decreased by 75 percent since the 1960s. At the retail level, wine sales are increasingly shifting to supermarkets, wholesale clubs, and the like. For instance, Robert Mondavi now sells 10 percent of its wine in unit terms through Costco. These changes in the retail and distribution channels present substantial challenges for wineries, of course, because these powerful players such as Costco have much more clout and bargaining power than small liquor stores. Smaller vineyards often can find it more difficult to secure shelf space, and all wineries find themselves facing pricing pressure from the retail and distribution channels. † Even though many wineries do not like the changes and small retail shops are suffering because of this shift, many consumers are actually profiting from these changes. Winemakers have found another fun way to market their wines simply with their labels. The new â€Å"trend† in the wine business is a funky label. Traditionally, wine labels were simple and to the point. The label had the name of the vineyard, the year, and basic information about the wine in a simple fashion. Recently, winemakers have started to get creative with the names of their wines and the design of their bottles and labels. Now, when you walk down an aisle in a store filled with different wines there are many different bottles that stick out because of loud colors, wild pictures, or crazy names on the label. This is a great form of marketing to use for wine because the bottle itself is a great marketing tool. Many consumers will buy a bottle of wine just because they like how the bottle looks or maybe they are giving it as a gift and the title is something catchy that conveys some type of message that relates to the person who is receiving the wine. For example, there is a wine called â€Å"Bitch† wine. The wine itself is not bad, but its nothing to rave about. One of the main reasons that particular wine is so popular is because of the name. The label is black with pink script font with â€Å"Bitch† printed on the front, and on the back it just repeats the name of the wine over and over again. This wine is marketed to women and is a perfect gift to give a friend as a joke they can enjoy. Women have become a hot target market for wine makers. According to the 2006 Adams Wine Handbook, â€Å"Men prefer beer; women prefer wine,† Many women are emerging as winemakers and marketers are realizing the potential for profit in female consumers. â€Å"Women make up 52 percent of the adult population and purchase 57 percent of the wine consumed in the United States. 1 They represent a huge market with great purchasing power that until recently has been overlooked. According to experts, women are less influenced by wine ratings, as they tend to judge the entire product. Although the wine quality is important to women, so are the label design, the bottle shape and the philosophy of the winery. † (Wine Institute) While there are many new ways to market wine, the traditional methods are still widely used. Promotion in the wine industry is all about putting the name of the winery on everything from wine keys to wine bags to key chains to hats. Wine distribution companies have always been know to give out free merchandise with the name of the wines they sell everywhere. This is a great way to advertise. Consumers love to receive free things and that opens up a great opportunity for wineries to advertise with little cost. California former governor Arnold Schwarzenegger proclaimed September as â€Å"Wine Celebration Month†, also known as California Wine Month. This is another great way for wineries to get their name and wines out in the public. DiscoverCalifornaiWine. com states, â€Å"September is California Wine Month, and that makes it a fine time to enjoy a glass of California wine and a visit to wine country. September is harvest time in California and California Wine Month celebrates the state’s ideal climate for wine, beautiful wine country landscape, our talented and ingenious winemaking families, our celebrated lifestyle and cuisine; and our commitment to sustainability and the environment. † Another trend in the world of wine is sustainability and organics. Many vineyards around have become 100 percent sustainable and the numbers are growing. The new world culture is all about reducing our carbon and ecological footprint. So many wineries have actually capitalized on this idea. Wineries have begun to include their efforts at social responsibility in their advertising. Which caters to a growing market of consumers, as many people nowadays will only buy organic. Tolosa is a winery that has recently dedicated itself to sustainability and creating wine without harming the environment. One if their brochures stated that, â€Å"In August 2009 Tolosa converted to solar electrical generation. This system will provide the winery’s electrical energy for the next 25 years. CO2 emissions reduced by over 500 tons. This is equivalent to planting nearly 100 acres of trees. † Tolosa is one of the many wineries’ that has begun to capitalize on sustainability. The times have changed and so have marketing strategies of the wine industry. The wine industry is booming more than ever. Success in the wine industry is possible whether a company uses new or old marketing techniques. In this new age, the marketing department should focus on women and social media. As Tinckenell and Tincknell, a wine consulting and marketing firm, have written on the front page of their website MarketingWine. com, â€Å"If it doesn’t come from the heart, the message will be hollow. If you don’t imagine it first, someone else will. If it isn’t inspired and creative, it won’t get noticed. Each link in the marketing process — the heart, the mind, and creativity — communicates your story to the world. † Works Cited About Cork’d  « Cork’d Content. † Cork’d Content. Web. 20 June 2011. . â€Å"Discover California Wines : California Wine Month. † Discover California Wines : Welcome to Discover California Wines. Web. 20 June 2011. . The Changing Structure of the Global Wine Industry (2004). Michael Roberto. Salls, Manda. â€Å"Marketing Wine to the World — HBS Working Knowledge. † HBS Working Knowledge – Faculty Research at Harvard Business School. Web. 20 June 2011. .

Night World : Secret Vampire Chapter 1

It was on the first day of summer vacation that Poppy found out she was going to die. It happened on Monday, the first real day of vacation (the weekend didn't count). Poppy woke up feeling gloriously weightless and thought, No school. Sunlight was streaming in the window, turning the sheer hangings around her bed filmy gold. Poppy pushed them aside and jumped out of bed and winced. Ouch. That pain in her stomach again.-Sort of a gnawing, as if something were eating its way toward her back. It helped a little if she bent over. No, Poppy thought. I refuse to be sick during summer vacation. I refuse. A little power of positive thinking is what's needed here. Grimly, doubled over-think positive, idiot!-she made her way down the hall to the turquoise-and gold-tiled bathroom. At first she thought she was going to throw up, but then the pain eased as suddenly as it had come. Poppy straightened and regarded her tousled reflection triumphantly. â€Å"Stick with me, kid, and you'll be fine,† she whispered to it, and gave a conspiratorial wink. Then she leaned forward, seeing her own green eyes narrow in suspicion. There on her nose were four freckles. Four anda half, if she were completely honest, which Poppy North usually was. How childish, how-cute! Poppy stuck her tongue out at herself and then turned away with great dignity, without bothering to comb the wild coppery curls that clustered over her head. She maintained the dignity until she got to the kitchen, where Phillip, her twin brother, was eating Special K. Then she narrowed her eyes again, this time at him. It was bad enough to be small, slight, and curly-haired–to look, in fact, as much like an elf as anything she'd ever seen sitting on a buttercup in a children's picture book–hut to have a twin who was tall, Viking-blond, and classically handsome .. well, that just showed a certain deliberate malice in the makeup of the universe, didn't it? â€Å"Hello, Phillip,† she said in a voice heavy with menace. Phillip, who was used to his sister's moods, was unimpressed. He lifted his gaze from the comic section of the L.A. Times for a moment. Poppy had to admit that he had nice eyes: questing green eyes with very dark lashes. They were the only thing the twins had in common. Phillip said flatly, and went back to the comics. Not many kids Poppy knew read the newspaper, but that was Phil all over. Like Poppy, he'd been a junior at El Camino High last year, and unlike Poppy, he'd made straight A's while starring on the football team, the hockey team, and the baseball team. Also serving as class president One of Poppy's greatest joys in life was teasing him. She thought he was too straitlaced. Just now she giggled and shrugged, giving up the menacing look. â€Å"Where's Cliff and Mom?† Cliff Hilgard was their stepfather of three years and even straighter-laced than Phil. â€Å"Cliff's at work. Mom's getting dressed. You'd better eat something or she'll get on your case.† â€Å"Yeah, yeah †¦Ã¢â‚¬  Poppy went on tiptoe to rummage through a cupboard. Finding a box of Frosted Flakes, she thrust a hand in and delicately pulled out one flake. She ate it dry. It wasn't all bad being short and elfin. She did a few dance steps to the refrigerator, shaking the cereal box in rhythm. â€Å"I'm a †¦ sex pixie!† she sang, giving it a footstomping rhythm. â€Å"No, you're not,† Phillip said with devastating calm. â€Å"And why don't you put some clothes on?† Holding the refrigerator door open, Poppy looked down at herself. She was wearing the oversize T-shirt she'd slept in. It covered ‘ her like a , minidress. â€Å"This isclothes,† she said serenely, taking a Diet Coke from the fridge. There was a knock at the kitchen door. Poppy saw who it was through the screen. â€Å"Hi, James! C'mon in.† James Rasmussen came in, taking off his wraparound Ray-Bans. Looking at him, Poppy felt apang-as always. It didn't matter that she had seenhim every day, practically, for the past ten years. Shestill felt a quick sharp throb in her chest, somewherebetween sweetness and pain, when first confronted with him every morning. It wasn't just his outlaw good looks, which alwaysreminded her vaguely of James Dean. He had silky light brown hair, a subtle, intelligent face, and grayeyes that were alternately intense and cool. He was the handsomest boy at El Camino High, but that wasn't it, that wasn't what Poppy responded to. It was something insidehim, something mysterious andcompelling and always just out of reach. It made her heart beat fast and her skin tingle. Phillip felt differently. As soon as James came in, he stiffened and his face went cold. Electric dislike flashed between the two boys. Then James smiled faintly, as if Phillip's reactionamused him.†Hi.† â€Å"Hi,†Phil said, not thawing in the least. Poppyhad the strong sense that he'd like to bundle herup and rush her out of the room. Phillip alwaysoverdid the protective-brother bit when James wasaround. â€Å"So how's Jacklyn and Michaela?† headded nastily. James considered. â€Å"Well, I don't really know.† â€Å"You don't know?Oh, yeah, you always drop yourgirlfriends just before summer vacation. Leaves you free to maneuver, right?† â€Å"Of course,† James said blandly. He smiled. Phillip glared at him with unabashed hatred. Poppy, for her part, was seized by joy. Goodbye, Jacklyn; goodbye Michaela. Goodbye to Jacklyn's elegant long legs and Michaela's amazing pneumatic chest. This was going to be a wonderful summer. Many people thought Poppy and James's relationship platonic. This wasn't true. Poppy had known for years that she was going to marry him. It was one of her two great ambitions, the other being to see the world. She just hadn't gotten around to informing James yet. Right now he still thought he liked long-legged girls with salon fingernails and Italian pumps. â€Å"Is that a new CD?† she said, to distract him fromhis stare out with his future brother-in-law. James hefted it. â€Å"It's the new Ethnotechno release.† Poppy cheered. â€Å"More Tuva throat singers-I can't wait. Let's go listen to it.But just then her mother walked in. Poppy's mother was cool, blond, and perfect, like an Alfred Hitchcock heroine. Shenormally wore an expression of effortless efficiency. Poppy, heading out of the kitchen, nearlyran into her. â€Å"Sorry-morning!† â€Å"Hold on a minute,† Poppy's mother said, gettinghold of Poppy by the back of her T-shirt. â€Å"Good morning, Phil; good morning, James,† she added.Phil said good morning and James nodded, ironically polite. â€Å"Has everybody had breakfast?† Poppy's motherasked, and when the boys said they had, she looked at her daughter. â€Å"And what about you?† she asked,gazing into Poppy's face. Poppy rattled the Frosted Flakes box and hermother winced. â€Å"Why don't you at least put milkon them?† â€Å"Better this way,† Poppy said firmly, but when hermother gave her a little push toward the refrigerator, she went and got a quart carton of lowfat milk. â€Å"What are you planning to do with your first day of freedom?† her mother said, glancing from James to Poppy. â€Å"Oh, I don't know.† Poppy looked at James. â€Å"Listen to some music; maybe go up to the hills? Or drive to the beach?† â€Å"Whatever you want,† James said. â€Å"We've got allsummer.† The summer stretched out in front of Poppy, hotand golden and resplendent. It smelled like pool chlo rine and sea salt; it felt like warm grass under her back. Three whole months, she thought. That's forever. Three months is forever. It was strange that she was actually thinking thiswhen it happened. â€Å"We could check out the new shops at the Village — was beginning, when suddenly the painstruck and her breath caught in her throat. It was bad-a deep, twisting burst of agony thatmade her double over. The milk carton flew fromher fingers and everything went gray.

UN Millennium Development Goals Essay Example | Topics and Well Written Essays - 500 words - 1

UN Millennium Development Goals - Essay Example The targets set by United Nations are to ensure access to safe drinking water and safe sanitation mechanism to 50% population of the world by 2015. Moreover the resolution requires all the member countries of the United Nations to implement legislation to ensure sustainable development in all fields of technology in order to protect the environment for future generations (United Nations, 2011). Forests are deemed as natural lungs of the environment and are significantly important for ensuring consistency in carbon dioxide and oxygen concentrations in the natural air. Despite various incentives and recommendations provided by the United Nations, during the decade 2000-2010 South America and Africa lost 3.4% and 4% of the forests respectively, however the rate of deforestation did not rise considerably because Asia gained 2.2% of its total forested area during the same period. Despite the global recession, the various industrial units and vehicles in the world added 30.1 billion metric tons carbon dioxide to the atmosphere in 2008, 1.7 percent more than 2007 (UNEP, 2008). The Montreal Protocol have been very successful in this regard because under this protocol, the use of most of the ozone depleting substances have been controlled and the ozone levels are on the rise, with scientists expecting them to reach pre-1980’s levels by the middle of the century (World Bank, 2008). Provision of clean drinking water is still one of the major concerns and the increasing unplanned urbanization is further aggravating the situation. According to recent estimates, only 20% of the people living in the cities of Africa have access to clean and safe drinking water. The targets of sanitation are also far from being achieved and 2.6 billion people in the world still lack improved sanitation facilities (United Nations Office of High Commissioner on Human