Cost accounting

budgeting challenges it might face. Make sure that you take account of market circumstances in your response.” Introduction Generally, budgeting is a plan for corporation for the next year based on forecast of development trend of demand, supply, prices, costs and so on (Wallander, 1999). These assumptions are usually made by the government or relevant experts, head office of company would formulate more specific goals according to these information and the market circumstance as well as their…

products could fail. * The company may overestimate market size. * The actual product may be poorly designed. * It might be incorrectly positioned. * Launched at the wrong time. * Priced too high. * Poorly advertised. * Or the cost of product development is higher than expected. To create successful new products, we must: 1st. Understand its customers, markets and competitors thoroughly. 2nd. Develop products that deliver superior value to customers. To meet…

in the calculation of these transfers (demand) rather than volume, as our products are very large (up to $25 million) and project durations are extensive (up to two years) in length. Our finished goods inventory asset account demand is based on the “cost of goods sold” derived directly from the pro forma income statement. Our…

assigning costs used by companies that produce unique products or jobs” while on the other hand, a process costing is a “system of assigning costs used by companies that produce similar or identical units of product in batches employing a consistent process” (p. 242). In other words, in a job costing system, a company can accumulate production cost to a specific unit. It is often used by companies involved in creating customized products like airplanes, advanced technology systems, and…

Staff Competence and Procurement Planning Boyatzis (2008), define competency as a capability, ability or an underlying characteristic of an individual which is casually related to effective or superior performance. It is a set of related but a different set of behavior organized around an underlying construct, which we call the “intent”. The behaviors are alternate manifestations of the intent, as appropriate in various situations or times. Competence is a cluster of related abilities,…

controlling fixed cost in their organizations because fixed costs can decrease per unit if the number of units increase, up to an extent (Edmonds, Tsay, & Olds, 2011). Fixed costs are the costs that remain unchanged regardless of an increase or decrease in the number of units sold (Edmonds, Tsay, & Olds, 2011). Therefore, if the number of units sold increases, the total fixed costs is distributed throughout the total number of units sold (Edmonds, Tsay, & Olds, 2011). As a result, the fixed cost…

Strategic benefits of CPA 1. Cost and revenue management Without the allocation of marketing, sales, and service costs to individual customers, there is no way of knowing whether the investments made in business development are justified. CPA enables account managers to bring marketing expenditures per customer in line with current revenues per customer and with future revenue potential. Revenues are managed through pricing. There are three important issues related to pricing: discounts, the…

Question 1: What is the value chain? It is beneficial for organizations to strategically analyze costs to determine whether or not its costs are competitive with other companies in the same market. This comparison is done through what is known as a value chain, which analyzes the cost of internal activities and how they compare with competitors to determine which are sources of cost advantage or disadvantage. A value chain serves the purpose of examining the operating activities that businesses…

Costing and pricing methods reviewed Cost-orientated pricing Many small businesses determine their basic price based on their costs. The idea is to set your price high enough to cover your costs and still make a profit (Van der Walt et al., 1995). Cost-plus pricing Many small businesses use this method. Here you determine the cost of the product and then add a set percentage to the cost for the profit margin. This method is popular and easy to use. Assume you are the manufacturer of steel…

projected to sell. Overhead and Variable Costs Overhead costs “are based entirely on estimated data, the overhead cost applied to work in process will generally differ from the amount of overhead cost actually incurred” (Garrison, Noreen, & Brewer, 2014 p. 104). The case study states that Nozomi failed to consider the real cost of running a large dealership and for this dealership the make ready and general overhead costs per unit based on the total overhead cost divided by the number of cars…