Advantages And Disadvantages Of Inventory Management Systems

To be successful in today’s business environment, an organization must be able to perform certain fundamentals accurately and efficiently. One of these elements is having an effective and efficient Inventory System Management (ISM). ISM enables one to have the knowledge of where his or her inventory is at every step of the way. This allows one to better interact with consumer and make sales. Choosing the right ISM can lead and pave the ground work for future business success and profitability.

1.For which of the following products would job order costing be least likely to be used?

The Ilarion Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $117,000 of manufacturing overhead for an estimated allocation base of $90,000 direct labor dollars. The company has provided the following data in the form of an Excel worksheet:

The author was able to provide a detailed aspect of variable costing with clear emphasis on the importance of variable costing. According to the author, differentiating between fixed and variable costs is the first step in controlling costs. The article is helpful in understanding cost relationship and its correlation to cost absorption in manufacturing

| (TCO F) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:

EEC should use a job order costing system. First off, I will start by describing what is job-order costing and process costing. Job order costing or job costing is a framework for appointing assembling expenses to a singular item or clusters of items. By and large, the job order costing framework is utilized just when the items produced are sufficiently not the same as one another. The point when items are indistinguishable or almost indistinguishable, the process costing framework will probably be utilized. Since there is a critical variety in the items fabricated, the job order costing framework will make work expense record for everything, occupation or unique request. The occupation expense record will report the immediate materials and immediate work really utilized in addition to the assembling overhead appointed to each one employment Process costing is a term utilized within cost accounting to portray one technique for gathering and doling out assembling expenses to the units generated. Preparing expense is utilized when almost indistinguishable

• This cost method does not provide the best system for JDCW’s cost allocation. By using only three overhead rates the present system grossly undermines the true production costs since other activities of the production process are not acknowledged.

Plum’s simple costing system allocates all manufacturing overhead on the basis of machine-hours, an output unit-level cost driver. Consequently, the more

After having discussed how this assignment was in regards to our Cost Accounting course, Mr. Beadini first stated that it was essential to note that job costing was being used within his company. He mentioned that job costing is what best matched the flow of work for his mechanic shop considering that they are a service-based company. This means that, for River Oaks L&E, their work is broken into separate jobs so that each job can be tracked separately because each job that is being done is unique. For example, Mr. Beadini stated that for each

1. Define and explain the meaning of a predetermined manufacturing overhead rate that is applied in a job-order costing system.

| (TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system?

A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

Nowadays, in an era that has advanced technology and a place in the world. Everything can be linked only at your fingertips in the times of rapidly developing with the sophisticated technology of today. Therefore, an inventory system is also not lagging behind in introducing a method of keeping an inventory data systematically and safely. The system plays a very important role in improving the competitiveness of a business. Usually, organizations today face too many challenges to achieve the cost, speed and reliability. Efficient inventory system really help in order to make sure the store’s performance and data record is always in good condition and secured from abusers. The system basically to ease the admin to manage the

The current method of apportioning production overheads based on direct labour hours can be described as a traditional approach to product costing. In a manufacturing company’s financial statements, each item produced must be allocated some of the production overheads to make the statements compliant. Sometimes the individual costs of these items can be calculated incorrectly based on overall production overhead and the system of allocating in place, however the overall financial statement can still be accurate. This traditional method of allocating the production

Due to the increasing globalization of markets, the level of competition has increased considerably; thus, leading to increased inventory management complexity. Indeed, complexity has several negative consequences including high operation costs, time delay, customer dissatisfaction, inventory shortage, excess inventory, lack of collaboration, cooperation, and integration among supply chain participants (Hudnurkar, Jakhar and Rathod). A supply chain comprises of several business partners who work together either directly or indirectly. The interaction between these parties is characterized by the flow of information, material, and finances. These flows may lead to complexity if there is a lack of information within the participants. Notably, inventory management complexity is closely related supply chain management costs. An increase in complexity is known to result in higher supply chain costs. As such, this paper evaluates some of the causes of inventory management s complexity and their possible remedies.