Module 3 Case Assignment Example | Topics and Well Written Essays - 750 words

Module 3 Case - Assignment Example al Production Cost 3,100,000 Total Production Units 50,000 Production Cost Per Unit 62 Performance for the 2nd Quarter As far as the improvements are considered for the 2nd quarter, the assessment for Mr. Rosen is not under right direction. The information that they had provided, gives the same amount of net income under both approaches. Sales are same for both these approaches. However, the costing side is affected by these two approaches such that the costs are broken up on different methods under the two approaches. For instance, under absorption costing, costs are divided into two main categories which are 1) costs directly attributable to units sold, and 2) costs which are not directly related to the manufacturing process (Jordan and Harris, 2008). Conversely, if contribution margin costing approach is taken into consideration, the overall costs of the company are divided into 1) variable cost, and 2) fixed cost. Variable costs are the ones which increases of decreases with the number of units sold but remain constant on per unit basis. However, fixed costs are the ones that remain same regardless of the number of units sold, but for a certain capacity (Kinney and Raiborn, 2009). Cumulatively, the net effect of these two approaches has found to be the same under the given information. However, the breakup of the costs under both approaches can be observed in a distinct manner. The second quarter performance for the division is same because number of units sold is same as the last year. Although, the overall production cost has been increased because of increasing the number of units, but since the sales units are the same, therefore production cost pertaining to units that are actually sold, has been taken into account which has caused the same result for both approaches under both quarters. Suggestion on Appropriate Reporting System From the given information, there are few suggestions to be made. The clear difference between absorption and marginal costi ng approach can only be observed clearly if there is comprehensive information provided especially regarding the level of inventory. In that case, it would be a rather better approach to make a clear point regarding which costing approach provides the better results. For better results, Mr. Roses is advised to not only increase the production units but also increase the sales volume as well. This will substantiate better performance rather than focusing on the reporting approach to demonstrate better results which is not more than a complacent view. Shortcomings of Absorption Costing Approach There are various shortcomings of absorption costing as a method of internal

The legal nature of cards payment and the risk of insolvency Essay

The legal nature of cards payment and the risk of insolvency - Essay Example There exists a cutthroat competition that prevails in the credit card market in UK as there is a high level of card literacy among British consumers and this has resulted in the expansion of the market, with the number of cards and card transactions are showing a double-growth in recent periods in spite of global economic recession. Further, spending through credit cards in UK witnessed a dramatic increase and rose to ? 41 billion in 1995 from just ?10 billion in 1985 and then up to ? 101 billion in 2002.1 This research essay will analyse in detail about credit cards, debit cards, cheque cards, charge cards, etc. and the legal nature of the above cards and how they differ from each other and precaution to be undertaken by consumers while dealing with each type of cards in an exhaustive manner. Credit Cards Credit cards are issued based on the bank’s customer’s credit history, his total wealth and his income level. The credit limit starts from a few hundred pounds to man y thousands pounds. The client employs these cards to buy products and enjoy services or to get cash from the card service provider. The customer is expected to pay off his debt within the payment period and in case of any default, interest will accrue. Credit cards have some limitations as it could not be used for very large or very small payments. For small payments, credit cards cannot be used as it would not justify the cost of usage for the same. The credit cards will always have a security limit and due to security issues, these credit cards have a limit and cannot be used for large business transactions2. Secured Credit Cards Under collateralised or secured credit cards, the quantum of credit is decided by the quantum of liquid collateral one able to give and despite of one’s past bad credit history, credit cards are issued to applicants. Thus, secured credit cards are issued to those with bad credit history, people with no credit history or individuals who do not qual ify for traditional credit cards. To be eligible for this, a customer has to make a deposit usually for a ?500 or more for one year or 18 months by way of certificate of deposit with the issuing banker which holds it as a security. Then, the customer has the credit limit to the value of the deposit and if the customer makes a default, then, the bank may use the deposit to adjust against the outstanding. Despite the fact, these cards still attract annual fees and interest charges that are equivalent or greater than those of regular credit cards3. Cheque Cards Cheque cards are identical in general appearance and in size to that of credit cards and contain analogues similar details. All major British banks and Irish banks are issuing these types of cards. Under this category, the bank issues a card that bears the name of the bank, its address, the customer’s specimen signature and his name, a special cheque card account number and the credit limit applicable. The cheque card iss uing bank ensures to honour the cheques drawn by its customer in favour of third parties, provided the limit mentioned in the cheque card does not exceed the amount on each cheque. Before issuing the cheque cards, the banks should have to establish the creditworthiness of their customers4. It is being undertaken by the cheque card issuing bank that any cheque not exceeding a certain amount fixed by the bank will be honoured subject