Essay

Best Grade Valued Based Controlling MBA Assignment

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Course
1585 (BUSINESS)

Institution
FOM Hochschule Für Oekonomie Und Management

This assignment covers various cost accounting methods for pricing strategy, cost allocation, and profitability assessment. It includes the plant-wide rate method based on different factors, such as machine hours and direct labor costs, as well as activity-based costing and life-cycle costing. The ...

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Uploaded on February 24, 2023
Number of pages 18
Written in 2021/2022
Type Essay
Professor(s) Unknown
Grade A+

value based controlling
business
best grade
finance
costs
full costing
break even point analysis
risk
assignment
probabilistic cost analysis
methods for pricing strategy

Institution
FOM Hochschule für Oekonomie und Management
Education
Business
Course
1585 (BUSINESS)

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ii

List of Tables
Table 1: Production cost per unit based on machine hours……………………………….2

Table 2: Final selling price per unit based on machine hours……………………………3

Table 3: Production cost per unit based on direct labor costs……………………………3

Table 4: Final selling price per unit based on direct labor costs…………………………..3

Table 5: Production cost per unit based on direct labor hours…………………………….4

Table 6: Final selling price per unit based on direct labor hours…………………………4

Table 7: Overhead allocation using different allocation rates…………………………….4

Table 8: Final selling price per unit based on different cost center’s allocation rates……5

Table 9: Allocation of variable overhead cost based on ABC costing method…………..5

Table 10: Production cost per unit based on ABC costing method……………………...5

Table 11: Final selling price per unit based on ABC costing method…………………….6

Table 12: Summary Assessment with percentiles………………………………………10

, iii

List of Abbreviations
ABC Activity-Based Costing
CEO Chief Executive Officer
EBIDTA Earnings Before Interest, Depreciation, and Taxes
EBIT Earnings Before Interest and Taxes
EBT Earnings Before Taxes
FIFO First-in-First-out
LCC Life cycle costing
R&D Research & Development

, iv

Table of Content
List of Tables .................................................................................................................... ii
List of Abbreviations ....................................................................................................... iii
1. Introduction .................................................................................................................. 1
1.1. Tasks ...................................................................................................................... 1
1.2. Pricing strategy ...................................................................................................... 2
1.3. Cost centers ............................................................................................................ 2
2. Findings: Different cost allocation methods................................................................. 2
2.1. Plant-wide rate method based on machine hours ................................................... 2
2.2. Plant-wide rate method based on direct labor costs ............................................... 3
2.3. Plant-wide rate method based on direct labor hours .............................................. 3
2.4. Using different allocation rates from cost centers ................................................. 4
2.5. Activity-Based costing (ABC) ............................................................................... 5
3. A look into the future: Life-cycle costing method ....................................................... 6
4. Equivalent units of production ..................................................................................... 6
5. Full-costing vs. Variable costing .................................................................................. 7
6. Profitability margin assessment .................................................................................... 8
7. Break-even-point analysis ............................................................................................ 9
8. Probabilistic cost and external risk analysis with Monte Carlo Simulation@Risk ...... 9
9. Conclusion .................................................................................................................. 10
References ...................................................................................................................... 12
Appendix ........................................................................................................................ 13

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