Selecting And Applying Costing Systems And Techniques

(TCO B) You are the project manager for three projects. You are about to estimate costs for these three projects. Given the below information on each project, recommend an appropriate estimation method and justify your answer for each.

3. Under the new activity-based costing (ABC) system, compute the indirect cost allocation rates for each of the three activities:

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

Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level, batch-level, product-level, or organization-sustaining?

The main differences between a job costing system and a process costing system can be summarised to the cost objects used, the size of the job and production, identification of the product, whether work in progress is present at the start of the period, the method of cost accumulation used and when cost are asserted.

After taking out any costs of goods with our gross margin of 67.27%, we expect to make $2,071.92 from each customer throughout their boat ownership length.

Under a "just-in-case" or JIC practice where all components for a month's Flow Controller production will be purchased together, the total receiving and material handling costs will be only $14,000 (1/10 the cost). Some assumptions will be necessary for calculating an inventory storage and carrying cost charge. The total cost of flow controller components purchased each month is $88,000. Assume uniform production during the month so that the average inventory cost is $44,000 (50% x

The table below shows the expected costs of materials and labour, and includes contingencies. I have written contracts with the tradesmen involved, to ensure no additional labour costs.

The job order costing system determines the cost of a product or service based upon three components of price. They include direct materials, direct labour and manufacturing overhead such as the electricity used to run machines on a production line. There are some weaknesses of using job-costing system in the calculation of the cost in the companies.

Question 1: Compare activity based costing (ABC) with traditional costing. Is it an improvement? If so why? Explain with a case (numerical).

The costing systems aid companies in determining the cost of a product in relation to the revenue the product generates. The costing systems commonly used in businesses include activity-based costing and traditional costing. Traditional costing system assigns the manufacturing overhead based on the capacity of a cost driver. For example, the amount of direct working hours required to produce a particular item. Cost drivers are factors that cause cost to incur, like machine hours, direct material hours, and direct labor hours. Activity-based costing system allocates cost of manufacturing a product in accordance to the activities required to produce the particular item. It’s therefore essential for managers to understand the merits

Nonvalue-added activities do not add value to the goods or services. 1–4. Differential costs are important for managerial decision making, but other cost data can provide management with additional important information. For example, inventory values and costs of goods sold are important for income tax and financial reporting purposes as well as for most bonus and cost-plus contracting purposes. Costs for performance evaluation are not necessarily differential costs. Companies try to recover all costs, hence some estimate of total costs is needed. (This could be an opportunity to discuss short-run and long-run costs with students, noting that in the long run, all costs must be covered.)

Accounting to determine which items or jobs are generating the most net income can be extremely important to financial managers in today’s economy. Managers must determine which products are making performing the best so that they can capitalize on profits. This also helps to know when it should cut its losses. There are three very useful methods of identifying costs associated to a particular item which are job order costing, activity based costing (ABC), process costing. Job order costing isolates costs to a particular job. ABC compares multiple items which are manufactured. Process costing assesses items which are massed produced and provides analysis to the cost through the various stages from beginning to completion. This essay will explain each of these methods and then provide examples for each of them.

In this assignment I will be discussing how costs incurred in any organization may be classified in a number of different ways for a number of different purposes. I will also be looking to find companies that use a variety of different costing techniques and methods. I will also be discussing the comparisons between marginal and absorption costing and how the concept of activity based costing can also be compared with these. To complete the assignment I will be using a combination of lectures notes, text books and the internet to research the various ways of cost classification, and how different companies use these, to enable me

Abstract: Competition today is one of the major threats to an airline industry. Competitive advantage therefore can be achieved by establishing cost leadership. The ultimate challenge faced by any company would be to leverage between the escalating operational costs and falling revenues so as to maximise the profits. Determine the costing procedure of an airline industry and the various possible efforts it takes to reduce the costs. The airline industry employs a trend and horizontal analysis to evaluate its performance and productivity. This industry can be categorised into international, national, regional and cargo operations. The major costs incurred by the airline industry are weather costs, fuel