The effect of the production volume variance on absorption costing income

Article Abstract:

A review of the managerial accounting literature reveals a misconception that the Production Volume Variance (PVV) affects absorption costing (AC) income. This paper uses an innovative presentation of the AC income statement to demonstrate that the magnitude and direction (favorable or unfavorable) of the PVV has no effect on AC income - the PVV Irrelevance Proposition. This paper confirms the real cause of changes in AC income. The literature also implies that the PVV is relevant to the reconciliation of AC and variable costing (VC) income. This paper's unique presentation demonstrates that the PVV is irrelevant to the reconciliation, and in addition, clearly illustrates the real reason for the difference between AC and VC income. (Reprinted by permission of the publisher.)

Profits, Production management, Corporate profits

---

Pricing and indirect cost allocation - a note

Article Abstract:

Companies that use cost-based pricing usually allocate indirect costs to their products. An inherent problem with this is that, while product prices are a function of the total cost, indirect cost allocation methods based on revenues depend on the product prices. This paper shows how to simultaneously determine unique product prices (with unequal markup rates) and cost allocation using the relative revenue method. (Reprinted by permission of the publisher.)

Prices and rates, Products

---

Incentives to underprice

Article Abstract:

The pricing patterns of initial public offerings and impact of under pricing in these patterns is discussed.

Australia, Management dynamics, Pricing Policy, Management, Going public (Securities), Initial public offerings, Company business management, Company public offering, Product price

Similar abstracts:

• Abstracts: The effect of problem recognition style on information seeking. Expert systems: the integrative sales management tool of the future
• Abstracts: Field dependence cognitive style as a moderating factor in subjects' perceptions of auditor independence. Perceptions of Australian finance managers on the impact of advertising on the accounting profession: some empirical evidence

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.