Costing methods, variance analysis and continuous improvement

Costing methods, variance analysis and continuous improvement Costing Methods Assignment 1 – Cost Accounting DBSM703 – Business Financial Principles and Techniques 13 November 2014 Marginal Costing and Absorption Costing (Questions 12) Definition.Marginal Costing is a method for computing costs which takes into account only the varying costs involved in the manufacturing process. Absorption costing is a costing method which considers all costs involved in the production regardless of its nature whether it is variable or fixed cost. (Averkamp H. , 2014) Differences. The two methods can be distinguished from each other through several notable differences. First is through its cost concentration. Marginal costing is mainly concerned about variable costs while absorption costing considers all fixed and variable costs incurred by the organization through all its activities. Second, is through its use. Marginal costing is used by organizations to aid them in decision making and business planning. Through its detailed presentation of costs or expenses, companies will be able to carefully study its processes to help them identify areas for improvement and for total quality management. Absorption costing is used mainly for external financial and income tax reporting. It is also a tool for the organization in presenting the actual valuation concerning its overall operation (involves inventory, fixed and variable costs, etc.) to their investors. (Averkamp H. , 2014) Similarities. Both accounting system are effective in presenting the actual valuation of an organization with regards to its operation by avoiding manipulation and misdeclaration of profit or loss by the company. The two system are also similar through its treatment of manufacturing and non-manufacturing costs. 3. Three Major Influences in Pricing Decision Customer Demand. Demand is very important in all the major business activities of the company from the sourcing of raw materials, product design and manufacturing. For example, there is a very high demand from customers for high quality performance cars. For car manufacturing companies, this demand would entail sourcing high quality materials, and more comprehensive production and testing process to ensure product quality which would also lead to higher prices. However, it is very important that despite of the rise in production expenses, companies should work their best not to price their product above the market for them to remain competitive. To be able to do that, companies need to regularly conduct market research, surveys, marketing and advance business planning to help the company design its manufacturing process that will enable them to provide quality products at a reasonable price. (Hilton) Costs. In most cases, companies price their product based on its production costs. For example, in the manufacturing of high-quality performance cars, the main determinant of price would be the amount of cost incurred in its production per unit. Again, to remain competitive and ensure profitability, the company should determine how much markup they are going to charge on top of the production cost and in consideration of other indirect costs involved (holding costs, marketing and other expenses). (Hilton) Actions of Competitors. To remain competitive, the company should always be on the lookout on its competitors activities. In the example given above, if a competitor lowers down the price of its high-quality performance car, it is very important that the company do the same to avoid the risk of losing its share in the market. However, the company should exercise caution in following the actions initiated by its competitors. In this aspect, it is very important for the company to define its product and highlight its strong points (technology and materials used, technical specifications, safety features, etc.) to distinguish their product from that of their competitors thus providing them certain leverage to justify their pricing. (Hilton) Political, legal and reputation. Legal factor affect the pricing of commodities because of the need for companies to submit to the requirements of the law. Some business laws were crafted to prevent companies from colluding among themselves to manipulate prices and take advantage of consumers. Examples are the Oil Deregulation Law to prevent forming of cartels by petroleum companies and the Anti-trust Law to regulate competition and prevent monopoly. Political landscape in a country where the business operates also directly affects the pricing of goods and services. For example, in New Zealand due to the pressure brought by the extensive lobbying of rights group, environmental and health activists the government was forced to legislate and pass a bill that would impose higher taxes on tobacco and alcohol products resulting to steeper prices of the said commodities. Reputation also affect product pricing especially to those companies who have already established a solid reputation for producing quality and high performance products. Companies like Apple normally set a higher price whenever they launch a new product to the market regardless of competition. (Hilton) 4. Cost Object Cost object is an accounting term used to refer to any item or product that has a cost of its own. The term may be used for items whose cost can be calculated through estimates, direct measurement or market valuation. (Schmidt, 2014) Examples of cost object includes: Services – Car maintenance or repair service that has a specific cost for every service done. Product – A bicycle. The cost for its development, design and production can be measured directly. Projects – A construction project with a specified cost for infrastructure design and implementation. Departments – Marketing Department for which the cost of all its activities like promos and advertisement is specified. (Schmidt, 2014) 5. Direct and Indirect Cost Definition. Direct Cost are costs that can be easily linked to a cost object. Indirect Cost are costs that are related but cannot be easily and accurately linked to the cost object eventhough the cost is incurred in producing the product. (Jan, 2013) There are several factors affecting the classification of costs. They are Materiality, Function and Information Gathering Technology. Materiality. The classification of costs as direct or indirect depends on the contribution, relevance, impact and actual value of the cost to the end product. The greater the cost, the easier it is to establish the link to the final product. (eFinanceManagement.com, 2014) Function. Another factor that affects the classification of costs is on how the cost was used in relation to the major business activities of the company like in research and development, production, distribution, selling and administration. (Vivekanand, 2014) Information gathering technology. The continuous advancement in information technology paved the way for the development of software application that helps company easily trace costs. Nowadays, big companies emphasize the importance of information management and reporting system as an effective method that enables them to properly trace the smallest of costs. (eFinanceManagement.com, 2014) Opportunity Cost Opportunity cost is the income or value that a company or person gives up in favor of one particular decision. (InvestingAnswers.com, 2014) For example, in the morning you have two choices to help you kickstart your day. One is to drink cup of coffee or to eat an apple. For you both has its benefits, coffee for your caffeine needs and apple as a healthy alternative. You choose coffee over apple. By choosing coffee, the benefit to your health that you can get by eating the apple becomes your opportunity cost. To avoid what economists says as â€Å"decision making pitfalls†, it is very important for managers to take into consideration opportunity cost or do a simple cost-benefit analysis in order for them to arrive at an intelligent decision. (UKEssays.com, 2014) Opportunity cost is also very important in helping companies evaluate their decisions for future considerations especially when the alternative decision they give up turns out to be the better option. (InvestingAnswers.com, 2014) Management By Exception And Variance Analysis Management by exception is a management style that focuses on the areas of the organization whose plans are not working according to expectation. The goal is to provide immediate attention to the problem by concentrating company resources like time, money and effort to help them strategically address the issue or problem. (BusinessDictionary.com) Most companies were able to identify specific areas in their business that are not working according to plan with the help of variance analysis. Variance analysis is a method used by organizations in determining the difference between the standard cost and the actual cost. The higher the variance between the standard and actual cost means that an area in an organization is not performing as planned. (Ahmed, 2014) Standard Costing and Its Importance in Planning and Control Standard Cost refers to the cost determined by the management based on available information concerning direct labor, materials and manufacturing overhead. This cost would serve as the benchmark for the company’s spending in relation to its actual business operation. Standard costing is very important because it helps management in setting their budget, better understand the expenses that would concern their operation, and most of all for determining its projected income. During actual operation, standard costing provides an avenue for feedback to the management in cases where variances arise between the standard and actual cost. It allows them to immediately focus their attention in areas where there are large deviations in actual cost against the standard cost to help keep the operation on track and as planned. (Averkamp H. , 2014) Variance Analysis and Continuous Improvement Variance analysis provides information that helps management measure the actual performance of different areas in their organization against expectation. (AC >SC = Unfavorable Variance; AC Job Costing vs. Process Costing Job Costing is a costing method being used by companies producing unique products where the cost is measured depending on the production requirements (Materials, Labor, etc.) of each product or unit produced. Process Costing is an accounting method used by companies involved in mass production of identical products and using an established or fixed manufacturing process where unit cost can be calculated by dividing the total cost with the total quantity produced. (Heisinger Hoyle, 2014) The following are the differences between process costing and job costing: Application. Process costing determines the cost of the total number of units produced by batch. Job costing is used to determine the cost of every product or unit produced. Product Cost. In process costing costs are assigned to the process while in job costing costs are assigned to jobs. Time Frame. Process costing has a period for which costs are accumulated while job costing has no time frame. In job costing, costs are computed after each job is completed. Unit Cost Information. In process costing, units cost is derived based on the production cost report (Total Cost (VariableFixed)/ Total No. of Units Produced = Unit Cost). In job costing, unit cost is determined based on the total cost of the job per unit. (Accountlearning.blogspot.co.nz, 2014) (Heisinger Hoyle, 2014) Job Cost Sheet *$978.00/200 Units = $4.89 per unit Process Costing 40,000/5000bottles = $8.00 / bottle SMK Pharmaceutical production cost for April 13. Responsibility Centre A responsibility centre is a unit in an organization tasked with a specific set of duties to help the organization effectively exercise control over their business and to help them achieve both their long term and short term goal. Usually there are four responsibility center in every organization (Cost Center, Profit Center, Revenue Center and Investment Center). Each center is headed by a manager. (Barnat, 2014) Cost Center. A cost centre is responsible for managing costs. There are two type of cost under cost centre. They are Engineered Cost and Discretionary Cost Centre. Engineered costs are those cost that can easily be linked with the cost centre (direct labor, direct materials and manufacturing overhead). Discretionary costs are costs that are allocated by the management on a discretionary basis (administrative cost, research and development, allowances, etc.). (Barnat, 2014) Profit Centre. The profit centres are like independent businesses within the organization. They are given autonomy in managing their own affairs from the strategic balancing of sales and expenses up to performing a more detailed management function like helping maintain quality, measuring employee’s productivity against wage, managing overhead expenses and everything that they can control within their unit. (Barnat, 2014) Revenue Centre. The sole responsibility of revenue centre is to generate revenue for the company through sales of goods or services. Most organizations set periodic sales target (daily, weekly, monthly, etc.) that whether surpassed or missed serve as an indicator of the performance of the unit manager or the revenue centre. An example of revenue centres are the outlet shops by manufacturing companies. The main focus of these shops is to sell company products with little or no consideration at all on costs and marketing. (Wikipedia.org, 2014) Investment Centre. The responsibility of Investment centre is to generate returns of investment through effective asset management, increased sales performance and the proper management of cost and expenses. Bibliography Accountlearning.blogspot.co.nz. (2014). Retrieved November 12, 2014, from Accountlearning.blogspot.co.nz: http://accountlearning.blogspot.co.nz/2010/10/differences-between-process-costing-and.html eFinanceManagement.com. (2014). Retrieved November 9, 2014, from eFinanceManagement.com: http://www.efinancemanagement.com/costing/costing-terms/211-direct-and-indirect-costs InvestingAnswers.com. (2014). Retrieved November 9, 2014, from InvestingAnswers.com: http://www.investinganswers.com/financial-dictionary/stock-market/opportunity-co

Respect Essay

I have been told that I need to write a 1000 word essay on disrespecting a Non Commissioned Officer. But it is really hard to write about this because I am having a hard time wondering how I disrespected them. So, where do I start on this and what do I say about it. As far as this essay goes I am just going to write how I feel about respect and how respect works both ways. It is wrong to disrespect a Non Commissioned Officer because they are appointed above me to guide me to the right place and things to do. But it is really hard to respect someone when they do not respect you. Respect works both ways and if that person or leadership does not respect you trying to respect them is difficult. No matter what is said it is disrespect. For example:I am writing this because I was called about a meeting that my squad leader decided he wanted to spring on the squad after we were released for the day. When I asked the squad leader was the meeting about something that we could have discussed the next business day, he replied no, with a sly smirk on his face. As he began to talk it was clearly the same information that was put out at the end of business. I do not know how that was disrespect when it was the truth. In regards to this essay I am not sure what to say about disrespect other then it works both ways. They tell you to respect the rank not the person but when that person abuses the rank it is really hard to respect it. I think that in today’s United States Army no one respects anybody the way that they should be. They are too quick to say that you are disrespecting them and that they are just trying to make you better but they are disrespecting you in the processes. How can you work for someone or some place when all that they do is disrespect you and everything that you do no matter what it is? When I first came in the United States Army a Non Commissioned Officer would work with you on how to be a good soldier and actually sit with you and respect you on what you were doing if you did a good job and worked hard they didn’t try to beat you down to where you just give up on everything. I used to respect everyone that was above me because they cared about you as a person they respected you and helped you with the hard things that were thrown at you and made sure that you were good not just quick to demote them and kick them out of the United States Army. They had an interest in you as a person and if they had something to learn from you then they would respect you enough to ask for help and respect you enough to talk to you. Respect and disrespect is a hard topic because I am a strong believer in respect someone and you will receive respect back or treat someone the way that you want to be treated. The whole time that I have been back in the United States Army the Non Commissioned Officers that were above me were basically like new privates. They were new to the job and they didn’t know a lot about it. I know that I have been in the United States Army for only a short time and I am only a specialist, I have worked with someone above me disrespecting me not just as a soldier, but as a human being. I feel that leadership should stop turning what people say into disrespect it was not that way AT ALL. I was just asking a questioning and stating the obvious, not disrespecting that person. You know they always preach about disrespect but they do not give respect at all. So as far as this essay goes how do I write it to what they want because no matter what is said in here they will one way or another say it is disrespect or some other form of berating them. 1 Respect and disrespect is an important part of a soldier Non Commissioned Officer relationship and needs to be enforced upon not only the soldier but also the Non Commissioned Officer and Officers. I have had a really hard time in this company because I think that people just think that I am just disrespecting them instead of getting to know their soldiers and how their soldiers talk and phrase things. They are quick to just say HA you disrespected me. I have seen way worse disrespect then what I have ever done to anyone. In my eyes disrespect is if you just plainly say hell no or fuck off. I have never done that and yet they automatically think that if you are asking them why you are told to do something it is disrespect but in fact is not disrespect it is that the soldier is trying to learn from them. If I remember correctly the Non Commissioned Officer Creed states â€Å"Competence is my watchword. My two basic responsibilities will always be uppermost in my mind-accomplishment of my mission and the welfare of my soldiers. I will strive to remain tactically and technically proficient. I am aware of my role as a Noncommissioned Officer. I will fulfill my responsibilities inherent in that role. All soldiers are entitled to outstanding leadership; I will provide that leadership. I know my soldiers and I will always place their needs above my own. I will communicate consistently with my soldiers and never leave them uninformed. I will be fair and impartial when recommending both rewards and punishment. †But it seems that only a few of the Non Commissioned Officers respect the lower enlisted. Why should soldiers’ words get twisted and why is that NCO’s are not respecting the soldiers and their needs. We need to be respected that is one of the many needs of the soldiers of today. That is why a lot of soldiers act out against Non Commissioned Officers. Ok so disrespect is all on what that person thinks is being said to them not really how and what is being said. When someone makes a statement and the other person comments on it, it is not disrespect it is just informing them on what they think. How is that disrespecting them? There is also a little thing that Non Commissioned Officers should do and that is lead by example and not respecting a soldier is not leading by example it is showing that that what is good for the goose is good for the gander or do as I say and not as I do! 2

Maypole of Merrymount a Failed Attempt to Escape English...

Nathaniel Hawthorne’s â€Å"Maypole of Merry Mount† still seems to follow the traditions and conventions of English Romanticism, despite having an American concept as its subject, in its use of several Romantic themes and figures. First among these themes is that of revelry and carelessness, as the Lord of May emphasizes: O, Edith, this is out golden time! Tarnish it not by any pensive shadow of mind; for it may be that nothing of futurity will be brighter than the mere remembrance of now passing. (Hawthorne, 1147) Another theme emphasized in the story is emotion, exhibited by the Lord and Lady of May. Reminiscent of many English Romantic poems, the idea of â€Å"love conquers all† is reflected on the thoughts, decisions and actions the†¦show more content†¦Such incorporation is also reminiscent of English Romanticism, especially ones that highlight fear as well as passion. Several Romantic works, such as Samuel Taylor Coleridge’s â€Å"Lamia† and John Keats’ â€Å"La Belle Dame Sans Merci†, exhibit this. This, in turn, draws its roots from continental European Romanticism. But what was the wild throng that stood hand in hand about the Maypole? It could not be that the fauns and nymphs, when driven from their classic homes of ancient fable, had sought refuge, as all the persecuted did, in the fresh woods of the West. These were Gothic monsters, though perhaps of Grecian ancestry. (Hawthorne, 1145) This is further reinforced by Hawthorne’s emphasis on fear by using it as a theme on the story’s climax. In the story’s penultimate scene, where the revelry ends, Hawthorne establishes a gloomy and fearful ambiance. Yes, with the setting sun, the last day of mirth had passed from Merry Mount. The ring of gay masquers was disordered and broken; the stag lowered his antlers in dismay; the wolf grew weaker than a lamb; the bells of the morris-dancers tinkled with tremulous affright. (Hawthorne, 1149) This emphasis to various emotions, almost blurring the intellectual aspect of the text, is another characteristic of Romantic literature, not only of England, but of continental Europe as well. The whole text, instead of just

What You Need to Know About Prose

Prose is ordinary writing (both fiction and nonfiction) as distinguished from verse. Most essays, compositions, reports, articles, research papers, short stories, and journal entries are types of prose writings. In his book The Establishment of Modern English Prose (1998), Ian Robinson observed that the term prose is surprisingly hard to define. . . . We shall return to the sense there may be in the old joke that prose is not verse. In 1906, English philologist Henry Cecil Wyld  suggested that the best prose is never entirely remote in form from the best corresponding conversational style of the period (The Historical Study of the Mother Tongue). Etymology From the Latin, forward turn Observations I wish our clever young poets would remember my homely definitions of prose and poetry: that is, prose words in their best order; poetry the best words in the best order.(Samuel Taylor Coleridge, Table Talk, July 12, 1827) Philosophy Teacher: All that is not prose is verse; and all that is not verse is prose.M. Jourdain: What? When I say: Nicole, bring me my slippers, and give me my night-cap, is that prose?Philosophy Teacher: Yes, sir.M. Jourdain: Good heavens! For more than 40 years I have been speaking prose without knowing it.(Molià ¨re, Le Bourgeois Gentilhomme, 1671) For me, a page of good prose is where one hears the rain and the noise of battle. It has the power to give grief or universality that lends it a youthful beauty.(John Cheever, on accepting the National Medal for Literature, 1982) Prose is when all the lines except the last go on to the end. Poetry is when some of them fall short of it.(Jeremy Bentham, quoted by M. St. J. Packe in The Life of John Stuart Mill, 1954) You campaign in poetry. You govern in prose.(Governor Mario Cuomo, New Republic, April 8, 1985) Transparency in Prose [O]ne can write nothing readable unless one constantly struggles to efface ones own personality. Good prose is like a window pane.(George Orwell, Why I Write, 1946)Our ideal prose, like our ideal typography, is transparent: if a reader doesnt notice it, if it provides a transparent window to the meaning, then the prose stylist has succeeded. But if your ideal prose is purely transparent, such transparency will be, by definition, hard to describe. You cant hit what you cant see. And what is transparent to you is often opaque to someone else. Such an ideal makes for a difficult pedagogy.(Richard Lanham, Analyzing Prose, 2nd ed. Continuum, 2003) Good Prose Prose is the ordinary form of spoken or written language: it fulfills innumerable functions, and it can attain many different kinds of excellence. A well-argued legal judgment, a lucid scientific paper, a readily grasped set of technical instructions all represent triumphs of prose after their fashion. And quantity tells. Inspired prose may be as rare as great poetry--though I am inclined to doubt even that; but good prose is unquestionably far more common than good poetry. It is something you can come across every day: in a letter, in a newspaper, almost anywhere.(John Gross, Introduction to The New Oxford Book of English Prose. Oxford Univ. Press, 1998) A Method of Prose Study Here is a method of prose study which I myself found the best critical practice I have ever had. A brilliant and courageous teacher whose lessons I enjoyed when I was a sixth-former trained me to study prose and verse critically not by setting down my comments but almost entirely by writing imitations of the style. Mere feeble imitation of the exact arrangement of words was not accepted; I had to produce passages that could be mistaken for the work of the author, that copied all the characteristics of the style but treated of some different subject. In order to do this at all it is necessary to make a very minute study of the style; I still think it was the best teaching I ever had. It has the added merit of giving an improved command of the English language and a greater variation in our own style.(Marjorie Boulton, The Anatomy of Prose. Routledge Kegan Paul, 1954) Pronunciation: PROZ