Week 3 Assignment

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Southern New Hampshire University *

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202

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Accounting

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Feb 20, 2024

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Ronni Harker January 28, 2024 ACC-202 3-2 Assignment: Costing Methods Company Overview: The company that I have selected for this assignment is Walmart. Walmart is one of the largest retailers in the world. Walmart offers its customers access to in person shopping as well as online ordering and other features including grocery delivery. Walmart has collaborated with multiple manufacturers over the years. Partnerships are essential for Walmart to continue selling their vast variety of products. Walmart has over 10,200 stores and employes nearly 2.1 million people globally. This company thrives on its motto of “Every Day Low Prices”. Low prices have always been an integral part of Walmart’s ongoing business strategy. As of December of 2023, Walmart’s revenue stood at a staggering $611 billion dollars. Costing Methods: Costing methods in an approach or style adopted by an organization to collect cost data in a more appropriate manner. Job costing is the approach to style in which was adopted by an organization to collect cost data where cost units are able to be identified separately and assigned cost on an individual basis. Walmart collects information from its stores, sales, and purchases through a centralized accounting information software that is connected and used in each and every store. Walmart uses the costing methods “Last in First Out” (LIFO) and “First in First Out”
(FIFO). LIFO is a costing method used to calculate weight cost on US Products and FIFO is used for international Products. Factory Overhead: Walmart’s largest overhead cost is their direct labor. In the United States alone Walmart employs 1.6 million. Walmart uses the activity-based costing (ABC) to recognize a total cost view of the company. By using the ABC System this gives Walmart the ability to reduce overhead costs and cost determinants since Walmart’s overhead costs are not spread evenly throughout all of its departments and products. Using this method allows Walmart to accomplish higher profit margins. Recommendations: Automation is the cost saving method that would benefit Walmart. An example of a company that uses automation effectively that most of the world is familiar with is Amazon. If Walmart were to being using automation they would benefit mostly in its distribution centers by increasing productivity and lowering labor costs.
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