Benefits of computing gross profit on sales in contrast to contribution margin

The computation of gross profit on sales, which can be derived under the absorption costing approach, is a profitability measure normally conducted under financial analysis.   This accounting ratio outlines the gross profit generated from every $100 of sales.   Such measure is highly useful in financial analysis, because it provides indications on the profitability potential and cost efficiency of the company.  Ã‚   For instance, if there was an increase in sales of 10%, but the gross profit margin declined by 4%. This indicates that the cost efficiency of the organization deteriorated during the period.   Such analysis cannot be conducted under the contribution margin approach, because gross profit is not present.   However, under the contribution margin approach one can calculate the contribution to sales ratio which indicates the contribution determined from every $100 of sales.   This would also provide indications on the control of variable costs once compared over time. Difference in Net Income arising from different approaches. In the example of ABC Company the profit under the two methods is the same.   However, this is not always the case.   Profits under the two methods differ whenever there is movement in inventory.   This is due to the fact that since under the absorption costing technique fixed manufacturing costs are included in the cost of goods sold, a proportion of fixed costs will be included in inventory leading to such a difference. Contribution margin approach not allowable for external reporting. The contribution margin approach, despite being highly useful to provide valuable information for decision making, is not acceptable for external reporting.   This is due to the fact that it does not comply with the Generally Accepted Accounting Principles (GAAP). For example, under the GAAP the income statement layout should clearly outline the gross profit made by the company.   Under the contribution margin method this is not highlighted.   Another important reason why the absorption approach is allowable for external reporting and not the contribution approach is due to the way in which the income statement is classified. The GAAP state that the income statement is classified by function, like under the absorption method.   In the contribution approach it is classified by cost behavior.   Indeed separation between fixed and variable costs is made under such method. This conflicts with another requirement of the GAAP. Reference: Drury C. (1996). Management and Cost Accounting. Fourth Edition. New York: International Thomson Business Press.

Compare between SAP system and Microsoft Dynamics system in ( Bill of Research Paper

Compare between SAP system and Microsoft Dynamics system in ( Bill of material) - Research Paper Example Others include NAV, SL, and AX. Dynamics NAV is designed in a way to suite mid-size companies. It is an ERP that incorporates both basic PM and accounting functions that are offered by other types like SL. Dynamics SL is best suited for managing projects and other accounting roles across many divisions in a firm. It was made to target construction management firms, distributors and any other contractor. Dynamics GP which will be our focus of discussion in this analysis is used mainly in the Americas, UK and Ireland, the Middle East, Australia and New Zealand. It was one of the first accounting packages released in the USA and was meant to run on Windows 32 bit machines. It was designed to be used in financial management, supply chain management, human resource management, project management and manufacturing. Dynamics AX was designed for global corporations and modern manufacturing firms. It offers all the functionalities of GP and also provides advanced business reporting and intell igence. SAP Business One This is an ERP that is used by all type of businesses i.e. small, medium and even in large companies. It is applied in business functions ranging from customer relationship management, purchasing and supplies, financial management and business analytics. It also provides comprehensive business intelligence and reporting. In 2011, SAP introduced a solution that was meant to consolidate business and enable intercompany integration. This was to enable multinationals to manage transactions and activities across multiple databases. The functions of the SAP ERP system can be broadly categorized into four broad modules i.e. Financial, Human Capital Management, Operations and Corporate Services. In financial management, it supports for multiples currencies, bank reconciliation and budgeting. In human capital management, it is applied in functions of managing the payroll, recruitment, human resources, learning and development and analysis of work functions. In operat ions, it provides functions like purchasing, manufacturing and research and development. In corporate services, it helps in asset management in areas ranging from real estate, travel management and project management. The business area chosen for comparison in this paper is supply chain management functions with respects to each ERP package. Supply Chain Management When we discuss about supply chain management, the discussion is based on two main core ideas; Every product that reaches the customers will represent a collective effort of many corporate organizations and this firms will be collectively referred collectively as a supply chain Unfortunately most businesses have only focused what happens within their premises in as much supply chains have existed for a long time. Therefore few business have understood the entire chain of activities that leads to the ultimate delivery of the final products to the customer Therefore supply chain management can be referred to the management of all the supply chain activities in order to improve

Analysis of Wallow's Character in Haunting of Olivia Essay

Analysis of Wallow's Character in Haunting of Olivia - Essay Example embarrassed to admit that he doesn’t see any ghosts† (Russell). From this line, the reader has an understanding that these are minds of young children who think they can find the ghost of their long-gone sister. Whether ghosts exist or not is a subject worth of discussion by those who believe in their existence. As the story develops, it is revealed to the reader that Wallow aged fourteen and his brother (the narrator) has been having numerous trips to the lake shore in search of their dead sister (Russell). They repeatedly scavenge through the boats at the shore with the hope of having a glimpse of their dead sister. The reader is able to notice the bully nature of the elder brother through the younger brother, who says, â€Å"On land, Wallow’s a loutish kid. He bulldozes whatever gets in his path: baby strollers, widowers, me† (Russell). These lines gives the reader an understanding of the kind of character Wallow sometimes retrieves into when he feels th at he has all it takes to be a bully. This also explains why he drives the brother in search of the sister’s ghost. From the story the reader is also able to comprehend that the parents of the two children have resumed travelling to third world countries since the death of their daughter. This is because they feel the sons are grown enough to take care of themselves. As the story comes to an end, the reader understands that nothing positive comes out of the brothers’ search for their sister’s ghost. ... In reference to the bullish nature of Wallow, the reader understands that in absence of constant care by the parents, the elder brother will always want to be protective of his younger brother. Character Traits of the Story’s Characters The character of Wallow in the story â€Å"Haunting of Olivia† is caring. As an elder brother, and at fourteen years of age, he protects his brother, who is twelve, because the parents are rarely with them (Russell). When they are scavenging the boats to find anything of value, the reader discovers that Wallow remains in control and keeps watch for the safety of both of them. This can be seen when he says to his brother: â€Å"All right, bro,† Wallow says. â€Å"It’s go time.† He takes my elbow and gentles me down the planks with such tenderness that I am suddenly very afraid. But there’s no sense making the plunge slow and unbearable...† (Russell). Moreover, Wallow is imaginative about nature and supers titious. He refers to the anniversary of his late sister as â€Å"unbirthday†. Since the sister died on that material day, he feels that it is her unbirthday. The reader knows that this cannot be termed as unbirthday. Wallow says, â€Å"†¦that means that tonight is Olivia’s unbirthday, the anniversary of her death† (Russell). The imagination and superstition in these lines is revealed from the fact that Wallow thinks that the opposite of birthday celebration is unbirthday. This is in reference to death anniversary of Olivia. Moreover, by believing that Olivia’s ghost is in existence and they ought to look for it, it is an act of superstition. Ghosts are not things that exist but they arise out of