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1- An overview
Wednesday, January 11, 2017 9:07 PM
Managerial- within a business, emphasizes decisions affecting the future, relevance, timeliness, and segment (part or activity of
business to get cost, revenue, or profit data) performance ex.- product lines, customer groups
Managerial Goals:
Planning: establish goals and specify how to achieve them
Accompanied by a budget
Controlling: gathering feedback to ensure the plan is properly executed (and modified if necessary)
Evaluating to see how you did and what you can change
Includes a performance report- compares budgeted and actual costs to learn where you did well and where you fell short
Decision Making: course of action from competing alternatives
What should we be selling? Who should we be serving? How should we execute?
IMA - Institute of Management Accountants - developed ethical codes for managerial accountants
Customer Value Propositions - creating a reason for ppl to choose them over competitor
Customer Intimacy -customization of products ex. Ritz-Carlton
Operational Excellence - "we do stuff faster, better and cheaper" ex. Southwest, Walmart, Google
Product Leadership - higher quality products ex. Apple, Gore-tex
Enterprise Risk Management- process used to identify risks and develop responses to them so they meet goals
Corporate Social Responsibility (CSR) consider needs of ALL stakeholders before making decisions
Business Process- the steps followed in order to carry out business steps
Value Chain - How different company areas interact
Lean Production (Just-in-time [JIT] Production) organizes resources that only produces in response to orders
Chapter 1 Page 1
Blake Axtell
Ch. 2 - Managerial Account and Cost Concepts
Thursday, January 12, 2017 9:23 AM
Cost Object: anything which cost data is desired ex. Products, customers, jobs
Direct Cost: can easily be traced to a specific cost object ex. Cost of paper for a brochure.
Requirement: must be caused by the cost object
Indirect Cost: can't be easily traced back ex. Cost of factory manager (factory produces many products and must allocate salary as such)
Common Cost: caused by numerous cost objects and can't be traced individually
Manufacturing Companies: Separate costs between manufacturing and nonmanufacturing costs
Manufacturing Costs: within this, 2 direct costs of (direct materials + direct labor) and 1 indirect (manufacturing overhead)
Direct Materials: include raw materials (materials used for final product), however insignificant materials (ex. glue for a chair) cost so little
that they aren't worth our time, so they are called indirect materials (under manufacturing overhead)
Direct Labor (aka touch labor): labor costs that can be easily traced to indiv. units of a product ex. Assembly line workers
If they can't be individually traced back-> indirect labor (under manufacturing overhead) ex. Managers, janitors, security
Manufacturing Overhead (indirect manufacturing cost, factory overhead, factory burden): everything except direct materials and labor, ex.
Indirect labor and materials, electricity, insurance
But only costs associated with operating the factory
Nonmanufacturing Costs (selling, general, and administrative costs): Either selling costs or administrative costs
Selling Costs (order getting/ order filling costs): all costs incurred to secure customer orders and get finished product out
Ex. Advertising, warehouse costs, sales salaries (can be direct or indirect)
Administrative Costs: general management of an organization ex. Executive pay, accounting costs, secretaries (can be direct or indirect) ex.
Account manager for A/R of east direct cost of the Eastern region, CFO an indirect cost
Cost Classifications
Use the matching principle (put cost where it cost us, allocate per time period)- match associated revenue with expenses
Product Costs (inventoriable costs [bc they are initially assigned to inventory]): all costs involved in acquiring or making a product (include
all manufacturing costs)
These associated costs "attach" to units of product, released as COGS once sold
Period Costs: all costs not product costs (all selling and administrative expenses) ex. Sales commission, advertising, executive
Not part of manufactured goods cost, expensed in period they occurred
Prime cost and Conversion costs
Prime cost: sum of direct materials cost and direct labor cost
Conversion Cost: sum of direct labor cost and manufacturing overhead (costs incurred to convert materials into the finished product)
Cost Classifications for Predicting Cost Behavior
Cost Behavior: how a cost reacts to changes in the level of activity
Categorize costs as variable, fixed, or mixed , the proportion of each type of cost is the Cost Structure
Variable Costs: varies relative to changes in level of activity (ex. direct materials, labor, COGS, power)
Must be variable with respect to something (aka its activity base (or cost driver) [what causes the incurrence of a variable cost]) like
machine-hours, units sold, labor-hours
Fixed Costs- remains constant, regardless of changes in the level of activity, ex. Rent, taxes, some salaries
The fixed cost per unit goes down as production increases
But dont report per unit in reports (false impression they change)
Can be either Committed or Discretionary Fixed Costs
Committed: multiyear planning, can't really change ex. Rent
Can't be cut short term w/o serious long term problems
Discretionary: arise from annual decisions ex. Research, PR
Relevant range: range of activity where cost behavior is linear
Ex. Machine can produce 3000 things, so fixed
cost is linear up to 3000, then changes
Chapter 2 Page 2
fixed or var. based on the past
Engineering Approach: detailed analysis of
cost analysis
High-low and Least-squares regression: analyze past cost and activity data
use cost as dependent variable on graph (bc it depends on the activity level)
use the activity for the independent variable (explanatory)
check if it is approx. linear or not
> with this graph, calc. variable cost by finding the slope>>>>
Traditional vs. Contribution Income Statements
Contribution I.S. mark a distinction between fixed and variable costs
Contribution margin= amount left of sales rev. after subtracting variable expenses
Differential Costs, Opportunity Cost and Sunk Cost
Differential Cost (incremental [when costs go ^] or decremental costs): diff. in costs bt 2 alternatives difference in revenues (usually in
sales) bt the 2 is the differential revenue think of this as MARGINAL COST (revenue)
Opportunity cost: what's give up for something else
Sunk Cost: cost that has already been incurred that cannot be changed - which is why we ignore them
Failure Costs
Internal: costs when you catch the product before it's sold may include scrap costs, reworking costs
External: after its delivered to customer, may include warranty repairs, replacements, lawsuit costs, loss in sales from bad rep.
Quality Cost Report - provides estimate to financial consequences, includes prevention, appraisal and costs of internal and external failures
ISO (Independent Organization for Standardization) 9000 Standards: company must have QC in place with defined levels of acceptable range,
fully documented, and consistent must be VERY well documented to pass
If Ford builds a car but buys the doors from a supplier, the supplier must also meet ISO 9000 standards for Ford to meet them
Chapter 2 Page 3
Blake Axtell
Ch. 3 - Job-Order Costing
Monday, January 16, 2017 5:06 PM
Absorption Costing: all manufacturing costs (fixed and variable) are assigned to units of product
Includes direct materials and labor, but also factory rent
Job-order costing: used when different products produced, costs must be allocated to jobs (orders)
Job Cost Sheet- records materials, labor and manufacturing overhead charged to job (see job cost worksheet)
Measuring Direct Materials Cost- if a standard product, based off the Bill of materials - document listing type and quantity of direct materials for a
product
Production order- issued when deal agreed upon (includes price and quantity) with buyer
Materials Requisition Form - document specifying type and quant. of materials to be drawn out of storeroom
Measuring Direct Labor Cost- must be easily traced
Use Time Tickets- use of barcodes to tell employees output (each job has a barcode)
Measuring Manufacturing Overhead w/ the normal cost system
Many use Allocation base- measure like direct labor-hrs or direct machine hrs, used to assign overhead costs
Predetermined overhead rate- how manufactured overhead is assigned to products (before a jobs takes place), = Est. total manufacturing
overhead cost /Est. total amt. of the allocation base
Process of assigning overhead costs to jobs is Overhead application
Overhead applied to a job= predetermined overhead rate x Amount of the allocation base incurred by the job
Ex. Overhead = $8 per direct labor hr*direct labor hrs charged to job
Not based on actual bc managers say there's no point in those fluctuations ex. Heating costs
Cost driver- a factor (ex. Machine hrs, beds occupied) that causes overhead costs
Underapplied and Overapplied Overhead generally actual not the same as predicted
Under if the predicted overhead was less than actual work in progress
May happen due to: prices may be more fixed, or bc spending on overhead costs not under control
Ex.
Chapter 3 Page 4
2. Allocated between Accounts- more accurate
assigns overhead costs to where they would have gone (WIP, Finished goods, and COGs)
first, calculate the amount of overhead applied to each account
then use these amounts to disperse the under/overapplied as such
Plantwide overhead rate: idea that there is a singular overhead rate for the whole factory
In larger companies Multiple Predetermined Overhead Rates more common, may even use different allocation bases
In service industry- each service\ or client is a "job"
Apdx. 3A: Activity Based Absorption Costing (assigns all manu. overhead costs to products based on the activities preformed to make those products)
activity- event that causes the consumption of manu. overhead resources
Activity cost pool- "bucket" where costs are accumulated that have to do with a single activity w/ 1 activity measure- allocation base (on denom. of for
activity cost pool)
Uses more cost pools than traditional and included some things that dont relate to the # of units produced ([including batch-level activity- preformed
each time a batch is handled/processed ex. Setting up equipment and placing orders] and product-level activities -must be done regardless of # of
products sold ex. Designing a product])
Ex. Puts into 3 pools, supporting direct labor, setting up machines and parts administration-> total manufacturing overhead
Apdx. 3B: The POHR and Capacity- addresses issue of too much fixed manufacturing overhead being applied to products
Looking only at fixed overhead (and assuming actual fixed = estimated overhead)
Ex. Making CDs
If output falls, this will change, making CDs appear more expensive-> managers want to raise prices (dumb)
So charge at full capacity-> underapplied
Chapter 3 Page 5
Blake Axtell
Ch. 5- Cost-Volume-Profit Relationship
Monday, January 23, 2017 10:17 PM
Cost-volume-profit (CVP) analysis: helps managers make decisions ex. what products to offer @ what price w/ what marketing
strategy and what cost structure to maintain
Looks at how profits are affected by:
1. Selling Prices
2. Sales volume
3. Unit variable costs
4. Total fixed costs
5. Mix of products sold
Adopt these assumptions to calculate: 1. Selling price is constant (doesnt change w/ volume change) 2. Costs are linear and can be
divided -> fixed (total = constant) and var. (constant / unit) 3. Mix of products sold is constant (for multiproduct companies)
4. Inventories dont change
Steps to CVP analysis
1. Look at the Contribution I.S. << the per unit costing is important
2. CVP Graph
1) Draw Parallel line to volume axis (=fixed expense)
2) Make the total expense line by marking 2 pts
3) Make revenue line
Contribution Margin Ratio (CR Ratio) can calc. % of sales for costs and such
CM ratio= Contribution margin/Sales each $1 ^ sales, 40% ^ -> CM
Profit= CM Ratio x Sales - Fixed Exp.
Variable Expense Ratio = Variable Expenses / Sales
Can use this to figure out if you should increase funding use incremental analysis- consider only the costs that change
Chapter 5 Page 6
1. Equation Method: Uses Profit= Unit CM x Q -Fixed Profit=0=$100 x Q -$35,000 = $35,000/$100=350= Q= break-even pt.
2. The Formula Method: just equation method rewritten = Unit Sales to break even = Fixed Exp./Unit CM
Finding the Break-even point in dollar sales 1)ex. =350 Speakers=$250 cost per speaker= $87,500 in total sales
2)Or can go like this: profit=CM Ratio x Sales-fixed exp. $0=0.4 x Sales - $35,000 = $87,500
3)Use formula method to compute: Dollar sales to break even= Fixed exp. / CM Ratio
Target Profit Analysis: Estimate sales volume needed to achieve a specific target profit
The Equation Method: Use the same as above Profit = Unit CM x Q - Fixed Exp. 40k=100 x Q -35k = Q = 750
The Formula Method: Unit Sales to attain the target profit = (Target Profit + Fixed Exp.) / Unit CM
By rearranging the equation we can also find the target profit analysis in terms of dollar sales Profit = Unit CM x Q - Fixed Exp.
or w/ eqn. Dollar sales to attain a target profit = (Target Profit + Fixed Exp.) / CM Ratio
Margin Of Safety the excess of budgeted or actual sales dollars over the break-even volume of sales dollars
^ margin of safety -> lower risk of not breaking even and incurring a loss
Margin of Safety in Dollars = Total Budgeted (or actual) sales - Break-even sales
Margin of Safety % = Margin of Safety in Dollars / Total Budgeted (or Actual) sales in Dollars
ex. Means that @ current level of sales, a reduction of sales of
12.5%-> break even
Operating Leverage: measure of how sensitive net operating income is to a given % change in dollar sales
^ Operating leverage-> small % increase in sales give much larger increase in net operating income
Degree of Operating Leverage = CM / Net Operating Income
With this know in general the % change in net Op. Income = Degree of Op. Lev. x % change in sales
The degree of operating leverage is not constant (greatest near break even pt., decreases as sales rise)
Commissions based on sales $, which may not reflect the highest contribution margin (can therefore lower profits)
Chapter 5 Page 7
Ch. 6- Variable Costing + Segment Reporting: Tools for Blake Axtell
Management
Tuesday, February 7, 2017 3:21 PM
Segment: part/ activity of organization where we look for profit, revenue or profit data
Overview
Variable Costing (Direct costing or Marginal Costing): only manufacturing costs that vary w/ output = product costs (ex. DL, DM and Var. MOH), Fixed MOH,
Selling, Admin costs= Period costs
Absorption Costing (full cost method): all manufacturing costs = product costs (fixed and var)
Selling and Administrative costs are always period costs
>
Absorption costing puts Fixed Manu in COGS when produced, not sold
Segmented IS ->>
Decision Making
Can look @ what the effects of
dropping a product would be
Break-Even Analysis
Companywide breakeven=$ sales to break even=
(traceable fixed exp. +common fixed) / Overall CM ratio
Absorption costing required for external reports, which is why many companies use this for internal
Some say better matches with revenue (all manu. Costs -> revenue)
GAAP and IFRS require segmented internal and external reports to use the same methods
Segmented Contribution IS statements have more info (which competitors can use)
Chapter 6 Page 8
Chapter 7- Activity based costing (ABC) Blake Axtell
Tuesday, February 14, 2017 1:37 PM
Activity based costing (ABC) - provides costs info for strategic decisions (may affect capacity (fixed and var costs)
Helps with internal decision making
Difference with Traditional Absorption costing
Nonmanufacturing costs assigned to products on cause and effect basis
Both traceable back to a product ex. Commission and indirect when the product makes the cost incurred
Some manu. Costs excluded from product costs
Also only apply used capacity into costing
Numerous cost pools used to allocate to cost objects
Activity- event that causes consumption of overhead resources Activity Cost Pool- "bucket" that costs are accumulated for a activity measure
Activity Measure- allocation base in ABC aka Cost driver -> Transaction Driver- count of number of times an activity occurs (ex. # bills sent out)
Duration driver- measure the amount of time required to perform an activity (ex. Time spent preparing bill)- more accurate
Unit Level Activities - performed each time a unit produced Batch Level Activities - performed each time a batch is handled or processed
Product Level Activities- regardless # of batches ex. Product design Customer-Level Activities- ex. Sales calls, tech support
Organization Sustaining activities- regardless of products produced, etc. ex. Heating factory, cleaning
Benchmarking - way to identify activities with the greatest room for improvement
Chapter 7 Page 9
Ch. 8- Master Budgeting Blake Axtell
Thursday, February 16, 2017 2:45 PM
Budget- detailed plan for the future should not be a way to attack managers if they are wrong
Used for
Planning- developing goals and preparing budgets to achieve these goals
Control- gather feedback to ensure plan is executed and modified as needed
What budgets do:
1. Communicate managements plans throughout organization
2. Get managers to think and plan for the future
3. Allocates resources
4. Uncover bottlenecks before they occur
5. Coordinate business activities of organization by integrating plans
6. Define goals and objectives which serve as benchmarks for evaluating performance
Responsibility Accounting- manager should only be liable for costs they can control
Continuous (Perpetual) Budgeting- 12 month budget that rolls forwards every month (or quarter)
Operating Budget- one year long starting at the beginning of the fiscal year
Self-Imposed (Participative) Budget- prepared with full cooperation and participation of managers at all levels
Advantages: individuals a member of a team, with valued judgments. Front-line managers have more accurate budgeting. Create more commitment.
Mangers more liable for their actions.
Disadvantages: Lower level managers might lack the broader perspective, managers create too much budgetary slack (budget easy to obtain)
Master Budget: separate but interdependent budgets (sales, production, financial goals)
Step 1: Make sales budget - expected sales for period
This figures out production budget, variable SG&A costs
Lastly: Cash Budget- shows how cash resources will be acquired and consumed
Direct Labor Budget- Shows direct Labor hours required to satisfy production budget
Manufacturing Overhead Budget- lists all costs of production other than DL and DM
Cash Budget- Includes 1. the receipts section (all cash inflows expected during the period, except financing section, mostly sales) 2. The disbursements
section (cash payments in period) 3. The cash excess or deficiency section (receipts-disbursements) 4. The financing section ( borrowing and repayments
made during the period)
Chapter 8 Page 10
Blake Axtell
Chapter 9 - Flexible Budgets and Performance Analysis
Saturday, February 25, 2017 12:41 PM
Flexible Budgets
Planning Budget- (from ch. 8 - prepared b4 the period begins and only valid for planned level of activity)
If level of activity changes, this doesnt become useful
Flexible Budgets- (take into account how activity level changes cost)
Flexible Budget Variances analyze where the variances between the flexible budget predictions and the actual results
Do via: Activity Variance or Revenue and Spending Variances
Activity Variances - variances due solely to the difference between the actual level of activity and that in the planning budget
Net op income increases more in relation to sales because fixed expenses dont change
Revenue and Spending Variances-
Revenue Variance- difference between what revenue should have been (predicted) and was
Spending Variance-diff. bt. actual amount of cost and what it was predicted to be
Chapter 9 Page 11
Chapter 10- Standard Costs and Variances - thru page 439 Blake Axtell
Thursday, March 2, 2017 9:18 AM
Standard- benchmark for measuring performance ex. Labor time standards for a task, cost and quality standards for meat
Setting Direct Materials Standards
Standard Quantity per unit- defines amount of DM to be used for each finished good (included allowance for normal inefficiencies [ex. Scarp and
spoilage]) ex. 3lbs of pewter
Standard Price per Unit- defines price that should be paid for each unit of DM (final delivered cost) ex. $4 per pound
Setting Direct Labor Standards
Standard Hours Per Unit - amount of labor hrs that should be used to produce one unit of finished goods
Standard Rate per hour - expected direct labor rate per hour (included employment taxes and fringe benefits )
Setting Variable Manufacturing Overhead Standards
Standard hours per unit- amount of allocation base required to finish one finished good
Standard rate per unit-how much company expects to pay in the variable portion (predetermined overhead rate *standard hrs per unit)
Standard Cost card -
Standard cost per unit- sum of DL DM and VMOH / unit
Standard Quantity Allowed (SQ) -for direct materials variances Standard hours allowed - for DL and MOH variances -- number based on stand
quantity (quantity consumed)
Chapter 10 Page 12
If insufficient product demand, could stock up inventory, however, not advised because based on lean production, ^ inv. -> more defects and wasted
inventory on obsolete goods
Chapter 10 Page 13
Blake Axtell
CH. 11- Performance Measurement in Decentralized
Organization
Thursday, March 9, 2017 2:24 PM
Decentralized Organization-decision making authority spread throughout organization, not just top executives
Advantages of decentralization
Top managers can focus more on bigger issues (ex. Overall strategy) rather than day-to-day problems
Lower-level managers know the most detailed and up to date info on the key info
Organization is more efficient in responding
Lower level mangers get a sort of training for higher level positions
^ lower level managers motivation and job satisfaction
Disadvantages
Lower level managers may not understand implications w/ companies overall strategy
coordination between managers may lack
Lower level managers may not have the same goals as companywide
Lack of central direction-> ideas harder to spread
Responsibility Accounting - systems that link lower level managers with accountability for the outcomes of the decisions
Responsibility Center- part of organization where manager has control over & accountable for cost profit and investments centers
Cost Center- of a manger who has control over costs, not revenue or investment funds.
Ex. Accounting, finance, general admin. and legal
Goal: Minimize costs.
Profit Center - control over costs and revenue funds (aka profits), not investment
Evaluated based on if they met targeted profit
Investment Center - control on rev., cost, and investments in operating assets
Ex. Control in investing in equipment
Evaluating Investment Center Performance- Return on Investment (ROI)
Higher ROI, greater profit earned per dollar invested in the segment's operating assets
Net Operating income used (income b4 interest and taxes aka EBIT (earning become interest and taxes)
Operating Assets- include cash, A/R, Inventory, plant and equipment, and other assets for operating use
Most companies use net book value (takes out accumulated depreciation - however-> ^ ROI as assets depreciate , but consistent w/ financial
reporting
Alternative- gross cost of an asset (constant over time)
Criticisms of ROI -
1. Managers need more feedback on how to increase ROI (and short term actions could hurt long term ones) - need a balanced scorecard- ensure
managers actions coincide w/ company's goals
2. Committed costs with no control is part of ROI
3. Manager might not invest in something that hurts their segment, but helps the company
Residual Income
Economic Value Added (EVA) - adaptation of residual income that some companies use
Things change ex. R&D goes from expenses-> investments
Problem: can't be used to compare performance of divisions of different sizes
Balanced Scorecard
Integrated set of performance measures to support a company's strategy
Ex. Southwest airlines: operation excellence (low fares, convenience, and reliability)
Characteristic
Falls into different performance measures, typically:
Emphasis on improving
Financial goals important, however so are the others
Chapter 11 Page 14
Financial goals important, however so are the others
Chapter 11 Page 15
Ch. 12- Differential Analysis Blake Axtell
Saturday, March 11, 2017 11:33 AM
Differential Analysis: focusing on the costs and benefits that differ between the alternatives
Differential cost (relevant costs)- difference in cost
Differential revenue (relevant benefits)- difference in revenue
The irrelevant costs can be ignored
Special Orders- one time order that is not part of the companies normal ongoing business
Do similar process as above
Only get 12,000 minutes of stitching time-> bottleneck In this bottleneck, Touring has a better CM Producing this much additional CM/ hr
Relaxing (aka elevating) the constraint- increasing the capacity of a bottleneck ex. ^ asking the stitching operator to work overtime, in this case
willing to pay an overtime premium of up to $720 per hr (if making touring panniers or 450 for mountain)
Can be done other ways: working OT, Sub contracting some of the processing out, investing in new machines, shifting workers f rom non-
bottlenecks to bottlenecks, improve business process in bottleneck, reduce defective units
Multiple Constraint Issues
Use of linear programming to determine this
Chapter 12 Page 16
Blake Axtell
Ch. 13- Capital Budget Decisions pgs. 584-595
Thursday, March 16, 2017 6:10 PM
Capital Budgeting- how mangers pan bug investments w/ long term implications
Goal: choose the ones with the greatest return
Capital Budgeting overview
Typical Cash Budgeting Decisions
1. Should new equipment be purchased to reduce costs?
2. Should new facilities or equipment be acquired to increase capacity and sales?
3. Which of the machines available should be purchased?
4. Lease equip. or purchase?
5. Replace old equipment now or later?
Screening Decisions- whether a proposed project is acceptable ex. Projects must have a 20% ROI
Preference Decisions- selecting among acceptable alternatives
Cash Outflows- most projects have 3 types of outflows:
Immediate cash flow for initial investment in equipment, etc.
Working Capital- current assets-current liabilities
Periodic outlays for repairs and maintenance and other operating costs
Cash Inflows- most projects also have 3 types of inflows
Increased revenue/ decreased costs
Selling equipment for its salvage value when the project is complete
Working capital that can be released to be used elsewhere after projects completion
Time value of money- money more valuable now than in the future (can invest money -> more $$)
Cost of capital- usually minimum required rate of return, avg. rate of return companies must pay creditors to use their funds
Chapter 13 Page 17
Blake Axtell
Ch. 13- Capital Budget Decisions pgs. 584-595
Thursday, March 16, 2017 2:01 PM
Capital Budgeting- how mangers pan bug investments w/ long term implications
Goal: choose the ones with the greatest return
Capital Budgeting overview
Typical Cash Budgeting Decisions
1. Should new equipment be purchased to reduce costs?
2. Should new facilities or equipment be acquired to increase capacity and sales?
3. Which of the machines available should be purchased?
4. Lease equip. or purchase?
5. Replace old equipment now or later?
Screening Decisions- whether a proposed project is acceptable ex. Projects must have a 20% ROI
Preference Decisions- selecting among acceptable alternatives
Cash Outflows- most projects have 3 types of outflows:
Immediate cash flow for initial investment in equipment, etc.
Working Capital- current assets-current liabilities
Periodic outlays for repairs and maintenance and other operating costs
Cash Inflows- most projects also have 3 types of inflows
Increased revenue/ decreased costs
Selling equipment for its salvage value when the project is complete
Working capital that can be released to be used elsewhere after projects completion
Time value of money- money more valuable now than in the future (can invest money -> more $$)
Cost of capital- usually minimum required rate of return, avg. rate of return companies must pay creditors to use their funds
Chapter 13 Page 18