Cost Accounting Essays (Examples)

Themido, I., A. Arantes, C. Fernandes & A.P. Guedes. (2000). Logistic costs case study: An
ABC approach. The Journal of the Operational esearch Society, 51 (10): 1148-1157

Stable UL: http://www.jstor.org/stable/253927

The use of Activity-Based Costing (ABC) reflects the fact that indirect costs and overhead costs are often more draining to modern organizations than direct costs.

The article specifically discusses the use of ABC in terms of its use in costing logistics services.

Traditional costing in logistics uses the direct product profit-ability (DPP) methodology which is "to identify all the costs associated with a product or an order as it moves through the distribution channel" (Themido et al. 2000: 1149).

ABC identifies activities "that are responsible for costs and therefore consume resources, provides a cost flow assignment chain which enables the activity costs to be continuously re-assigned or imputed to the products, customers, or services that use the activity" (Themido et al. 2000: 1149).

The article concludes…

An incorrect entry or inherent errors in the accounting procedures (for instance mistakes in contract cost allotment) can endanger the system. Organizations need to make sure that their employees are well versed with the latest cost accounting policies and have a backup plan for unfortunate mishaps. The presence of recruits who are unaware of the cost accounting process often destabilize the investments made on the accounting software (Tinsley, 2010).
Time is a crucial factor when it comes to cost accounting. The organization needs to function efficiently enough to face any government audits, even if conducted on short or no prior notice. Contractors need to be prepared and tackle any situation positively enough to receive affirmative evaluation results. Dealing with a company which associates itself with a recalcitrant accounting system wastes time. ecuperating from problems and reclaiming government approval is usually harder. It can result in premature expiration of contracts, dissipation…

Accounting Responsibility
Responsibility of managers in managing projects and creating budgets

Managerial ethics is essential in managing projects and creating budgets. Ethical accounting ensures all financial information is reported to business owners, directors or managers. Managers who fail to report negative information or use a company's internal financial information for personal gain can create serious legal situations for businesses (Vitez, N.d.). Business owners and managers often require all information, whether good or bad, when reviewing business operations and making decisions. It is also important to create accurate budgets. There is often a temptation to tweak budgets to fulfill personal goals. For example, if you favored a particular project you may try to make it more appealing financially. However, it is necessary to be as objective as possible to ensure that you create budgets ethically.

Accountable for achieving financial performance targets

Managers are often under immense pressure to meet financial performance targets. In some cases…

competing cost accounting approaches and explores best practices implemented in different countries. The essay examines traditional cost accounting (CA), activity-based costing (ABC), Grenzplankostenrechnung (GPK), throughput accounting (TA) and resource consumption accounting (CA).
Tradeoffs Between Cost Accounting Systems

Comparing traditional costs systems and ABC shows that there are tradeoffs between cost and usability. The traditional cost system is typically both easy and inexpensive to implement; however, the information obtained from the system may be too raw to be analytically useful. ABC provides useful information, but by comparison is expensive and time-consuming to implement (Abdallah & Li, 2008).

The use of a given accounting system involves tradeoffs which may make it better suited for some companies than others. Companies using a Six Sigma/theory of constraints (TOC) may benefit more from the throughput accounting (TA) approach. TA emphasizes variable costs, with the objective of increasing throughput while simultaneously decreasing inventories and operating expenses. TA thereby…

The consultant allocates fixed costs based on the ratio of departmental square footage to total dealer square footage, adjusted by a weighting factor. The weighting factor takes into account various machinery, equipment, furniture, and fixtures located throughout the dealership. The consultant used a factor of 1, which is an industry standard.

The consultant acknowledges that the departments have very different functions, costs and profits, however his attempt to allocate costs does not adequately take into consideration their differences. I believe that these results are questionable due to the lack of specificity in the financial statements. Given that the revised profitability number will be used to determine if jobs will be eliminated and is also used to determine the body shop manager's bonus, I recommend that if it is available that, Mr. Delaney provides more detailed information on the labor-hours or creates a better measurement system for both fixed and semi-variable costs…

Premier Products
he contribution margin is the revenue less the variable costs. We know the price for each product, and we know the variable material costs. Labor costs are also know ($5/hr). hus, the remaining issue is the allocation of overhead, which the company does on the basis of direct labor hours.

Contribution Margin

Product

Price

Materials

Labor

Overhead

Contribution

Cont. Margin

here are two production constraints. One machine can only be used for A or B, the other machine for only C and D. o maximize contribution margin, the company should produce the product with the highest contribution margin, which in this case is product B and product D. hey have the highest contribution, and contribution margin.

o determine the impact on profits, the current profitability should be compared with the profitability that would arise from the proposed change. A pro forma income statement will illustrate, but of course the actual sales are not provided. We don't know how profitable…

Accounting Course Concepts
Olympus Corporation

Company Overview

With sales of $10.6 billion for the fiscal year ended March 31, 2011, Olympus Corporation (hereinafter alternatively "Olympus" or "the company"), is a leading manufacturer of endoscopic medical devices, cameras as well as other sophisticated imaging devices, microscopes, and information and communications equipment (Verschoor, 2012). According to the company's business profile, Olympus Corporation competes in medical, life science, industrial and the imaging sectors (Business profile, 2014). Currently, Olympus Corporation competes in five primary business segments as follows:

The Medical segment offers medical endoscopes, surgical endoscopes, ultrasound endoscopes and others.

The Life and Industry segment provides biological microscopes, industrial microscopes, industrial endoscopes and non-destructive testing equipment.

The Video segment provides digital cameras and sound recording machines.

4. The Others segment is engaged in the provision of biomaterials, and the development of systems.

5. The Common segment mainly involves in holding investment and financial investment (Business profile, 2014).

As of March 31, 2013,…

This memo addresses the concern regarding the production cost report and why you were only credited with only 2,000 units equivalent units in ending inventory. The key question relayed to me is why the credited amount was not considerably higher compared to what you took into consideration earlier. The main reason why this is the case is linked to process costing and the equivalent units of production. There is usually a confusion between the units partially completed and the units totally completed. Basically, equivalent units of production are utilized by a manufacturer for the expression of partially completed units of product with respect to finished units. They key aim of utilizing equivalent units is to have the ability of apportioning the costs of production to completed units as well as partially completed units held in work process. In essence, the notion of equivalent units takes into account articulating a number…

Managerial Accounting for Sleepease Ltd.
"Identify, discuss and critically evaluate the advantages and problems of using the following costing methods for internal reporting purposes":

absorption costing; marginal costing.

"Refer to the Sleepease case as and when necessary"

absorption costing

The absorption costing is the type of managerial costing where both the variable and fixed costs are charged to process or product. Thus, "absorption costing is a method for appraising or valuing a firm's total inventory by including all manufacturing costs as product costs, regardless of whether they are variable or fixed and therefore it is frequently referred as the full cost method." (Nawaz, 2013 p 50).

Accordingly, the company will be able to determine costs of a product after determining both the variable costs and fixed costs. Sleepease will derive several benefits from using the absorption costing for the production of their product.

First, the absorption costing will assist the company to take the account of all…

Yet, financial statements and managerial accounting reports can be highly effective nonetheless. Sometimes they will merely confirm what the proprietor already knows, but there are inevitably going to be times when they will reveal that the proprietor's assumptions about the nature of the business are false. Moreover, accounting can act as essentially a second opinion. The proprietor may feel one thing is true, but the numbers can reveal something different.
Overall, accounting is an essential component of any business. Sole proprietorships often make less use of accounting, in part because the law does not obligate them to engage in any more than the most rudimentary accounting. However, proprietors should not overlook the value of accounting. Accounting helps to reveal the business' past performance, but can also be used to enact organizational controls today and to help plant for more effective operations in the future. By understanding the firm's cost structure…

Wood was used more for recording, ink and seals were used to write accounts on top of a piece of wood. It was used mostly by everyone as it was inexpensive plus it was very easy to write on top of it. Marked stick also played many roles, also known as counting tally. ut in fourteenth century, there was an argument for a decline in tallies and to increase the use of paper which was found in England. Still this was an expensive import, in a result tally remained there for many years along for efficient calculation's an abacus was used.
y 1700, few professional accountants were found in Scotland for the Italian method of book keeping. ut by 1800 there were many professional accountants who were operating in the major Scottish towns as the knowledge of accounting became even more common in the business community. The notable accountants were…

An unaware analyst may think the second company to be better but in reality its low encouraging level is due to the fact that it is unable to secure additional funding. The companies may possess different capital structures and to attempt comparison of performance when one is all equity financed and another is a geared company may not suffice for a good analysis. The chosen application of government incentives to several companies may also twist the inter-company evaluation. There may be the possibility of providing a company with the tax holiday while the other within the same line of business not, and evaluation of such two enterprises may be misleading. (Session 15: Limitation of atio Analysis)
As a matter of principle, the accounting strategies are required to be applied persistently. Changes are required to be emphasized and the influence of variations from an original policy revealed. This is applicable when…

Accounting
Differential Cost

Differential Cost strategy when used by an educational entity such as UOS means that the institution determines what it would cost to offer alternative forms of education based on the number of students interested in choosing those alternative forms. In other words, by offering choices to the students based on the student's specific needs and desires and then measuring the difference in cost when compared to other educational offerings, the school will know exactly what the differential cost is. This allows the school to offer courses and activities in the most efficient and effective manner, and in a manner that produces the highest amount of revenue with the lowest cost. By knowing the difference between the school's offerings and what the same type of offerings are being offered by their competitors, the school will be capable of offering more for less. As an example, if the school decided to…

Dibsa should turn towards the market-based pricing strategy, which sees the implementation of competitive prices for the 3-in-1 Lawnmower. The selection of this combination of strategies would generate several impacts upon the company, but most of them would be obvious at product lifecycle level. In this order of ideas:
The sales revenues would be significantly high throughout the first six months and they would allow the company to cover for the large costs incurred in the manufacturing of the product as well as register profits; they would however decrease with the implementation of the market pricing strategy and the 3-in-1 Lawnmower would metamorphose from a star product into a cash cow

The costs incurred in the manufacturing of the new lawnmower have already begun to decrease and will continue to do so; the actual impact of the pricing strategy is limited, with the specification however that these costs will not be…

Another example of pure job costing is web development, where the processes themselves vary hugely from project to project, meaning the cost and time involved also varies.
esponse

Dosch & Wilson (2010) do seem to do a good job of defining job and process costing, and the person who posted this seems to have understood these definitions fairly well in the abstract -- that is, the definitions provided seem reasonable and the application of these definitions to businesses chosen by the poster are explained in a way that clearly links them to these definition. At the same, the poster seems to have had some trouble accurately identifying companies where job costing might be employed, despite grasping the abstract technicalities of the definition of job costing. While it is likely that an individual laborer might be able to identify that they worked on a particular section of an airplane or wall of…

Accounting for Decision Making
Shelter Partnership's Case Study

Purposes of Cost Information

The intended purpose of cost information is to provide a basis for determining the expenses and revenues associated with a particular activity (or cost object). Generally, cost and income is measured in order to determine net income or profit margins. However, as Shelter Partnerships is a non-profit, the cost information forms a basis for the allocation of resources and to assist with decisions about scaling. The cost information of Shelter Partnerships can also be used to address any cycles in the stream of donations and contributions that can impact the overall ability of the non-profit to meet its mission. In addition, since Shelter Partnership regularly applies for grant funding, it is essential that their accounting system be readily interpretable to grant reviewing bodies. Fund development cannot be sustained for long in an environment that is only loosely accountable for revenue --…

However, when a shock happens that changes that pattern, the information is no longer relevant. In periods of turmoil, only the most up-to-date information is relevant. The usefulness of the information wanes quickly as the behavior of the company becomes more erratic. After a period of erratic behavior and change, the company may be forced to make internal changes that affect the way they do business. They may make changes that affect their inventory management, sales cycle, stock levels, supply chain, distribution network or other fundamental business functions. New patterns may emerge and the old information no longer applies.
The term "relevancy" can have many different meanings depending on what is happening with the company. A new accounting regime may need to be instituted when a change takes place. Looking at the most recent historical information is one way to determine the relevancy of the accounting information. The analyst needs…

It is known that the membership fee is $26. Using this, the variable cost per member can be calculated, as shown in table 2.

evenue per member (a)

$26

Fixed costs per member (b)

$20

Variable cost (a-b)

$6

If the membership fee is $26 per member, the membership fee, less the fixed cost (at the break even point) will give the variable cost per member.

The information in tables 1 and 2 can be used to assess the number of membership the Snap Fitness will need to sell each month if they wish to make a profit of $10,000 per month. As seen above, it is the contribution per unit that will initially pay for the fixed costs and then the profit. To calculate the sales needed for a predetermined profit level, the required profit should be added to the fixed costs. That total may then be divided by the contribution per members to give the number…

d.). The methods by which this information is gathered will differ based on the type of production that is being undertaken. Cost flow assumptions relates to how costs flow through inventory accounts. This can include FIFO, LIFO, weighted average and other methods. This impacts the costs because it helps to determine which costs are counted for which period. Recording interval capability refers to the points in time when a company takes inventory. Many firms use perpetual inventory, but some firms will take inventory periodically in order to provide this information.
Overall, cost accounting systems provide the information that managers need with respect to the costs of a product. By using a specific system, wherein decisions about methodology are made about each of the five parts of the cost accounting system, the system will be consistent through different products and through different time periods for the same product. This will ensure that…

ystems of income and financial position would superimpose standards of normalization upon everyone within the firm. Accounting, thereby, had achieved Foucault's definition of knowledge as power over people per excellence. By the 1950s, however, person as decision-maker replaced this vision of person as machine, and accounting still has power in our society, but a different sort of power. Likewise, accounting still possesses its constructivism (i.e. manner of perceiving a certain stranglehold on reality by emphasizing certain construct and demoting others), although its constructivist paradigm may have differed from that of, say, a century ago. Individuals are viewed, measured, and criticized within programmatic frameworks, and Miller and O'Leary (1987) suggest that accounting today can still be viewed as part of the heritage and structure (albeit slightly changed) of the traditional mode of power that it was in the early decades of this century. In other words, the slanted domination of…

accounting important success firm? What methods cost accounting ? The paper (a) identify main issues chosen area, (b) reference learning occurred, (c) build class activities incidents facilitated learning understanding, (d) present specific current / future applications relevance typical workplace.
Cost accounting -- definition, importance, methods

The modern day society is constantly presenting the economic agent with more numerous and more pressing challenges. In order to face them and emerge as a competitive institution, firms develop and implement a wide array of strategies, such as creating customer value, developing the skills of the staff members, establishing strategic partnerships or creating financial stability and accountability. One specific means in this endeavor is represented by cost accounting, which represents a key to organizational success. The current project focuses on the identification of the reasons as to why cost accounting is important to organizational success. A secondary research objective is that of pin pointing several…

When it comes to standard costing, what is referred to as a standard cost is assigned the costs (actual) of manufacturing overhead, direct labor as well as direct material. In this case, these costs are not assigned to a product. It therefore follows that amounts mirroring standard costs are what become identified first in regard to the cost of goods sold as well as inventories of a given manufacturer. In this case, it can also be noted that standard costing is regarded a rather important tool of management. Incase of any variance, the top leadership of the organization immediately becomes aware of the variation between planned/standard costs and manufacturing costs.
Conclusion

The information provided by cost accounting is critical when it comes to the effective management of an organization. Without such information, decision making would become an equivalent of operating in the dark for most businesses. For instance, firms would be…

. Some important ideas to keep in mind are that historical cost can be more reliable than fair value accounting (Flegm, 2008). As Laux and Leuz (2010) note, some have argued that fair value accounting was partly responsible for the great financial crisis of 2008. Thus, it is very important that cost accounting be approached honestly in every way.(evise feedback for highlight area above: Historical is required by US GAAP (for inventory/fixed asset), but some investments and other assets use FV. This is just for Financial Statement purposes not cost accounting. Is the evidence to suggest cost accountants are ignoring FV?)evised In addition, accounting may not accurately project the economic reality of certain business decisions. For example, investment gains and losses are now reported on the income statement and are included in Net Income calculations. This obfuscates the economic reality of how the actual business performed as investment gains…

financial crisis was abusive off-balance sheet accounting. Abusive off-balance sheet accounting led to a daisy chain of ineffective and dysfunctional decision-making because it removed transparency from regulators, investors, and markets. Spread of derivative transactions, bad loans, and securitizations brought a once stable financial system to the edge of ruin. While improvements have been made, the FASB's guidelines suffer from two main flaws. The first is lack of congressional mandate. With no clear congressional mandate, FASB and SEC guidelines remain subject to the same type of interpretation that led to the growth of 'regulatory arbitrage' or what others may pen as financial engineering, meaning shifting debts off-balance sheets. This means a company must consolidate a VIE only when it possesses 'control' and has the right to receive benefits and access to VIE's 'most pertinent activities' making the design of the guidelines qualitative in nature (Stickney, 2010).
The guidelines then require assumptions…

Introduction The delivery health care system takes into account the assimilation of physicians, healthcare facilities, together with other medical services with plan to facilitate the provision of the total continuum of medical care for its consumers. In a whole incorporated system, the three fundamental components including physicians, medical facilities and the membership to health plans are counterpoised in terms of equating medical resources with the necessities of patients and purchasers (Coddington, Moore, and Fischer., 1994). One of the key concerns in the present delivery of healthcare is cost. Increasing costs of healthcare has been a major worry in the past number of years, making the United States to have one of the most expensive systems of healthcare. The main objective of this paper is to analyze the different costs linked to healthcare delivery system, and delineate the manner in which these costs impact different populations and how it also affects health…

Accounting
This accounting report is intended to emphasize the importance of the role of a management accountant in business operational and financial decisions. The focus on two companies engaging in different lines of business with disparate concerns, questions, and issues provides a basis for the reader to understand specific instances in which a management accountant can play a pivotal role in the success of an enterprise. W. White Chemicals was perplexed about their loss of market share and a small drop in revenue. When the executives came together to discuss the problems, they each had a different opinion about the source of the problem and the possible solutions. The management accountant was able to demonstrate how a change from the traditional accounting system the company was using to an activity-based system would help the team interpret the market situation and get a handle on the actual, rather than the obfuscated, costs…

Accounting
The role of financial statements in investing is that they provide a consistent format that can be used by potential investors and other stakeholders to evaluate a company. There are several components that facilitate this happening. For publicly-traded firms, Generally Accepted Accounting Principles (GAAP) play a key role in the creation of financial statements. GAAP is a common set of accounting principles and procedures that companies use to compile their financial statements (Investopedia, 2012). ith companies having to produce their statements according to a common set of criteria, the information is easier to compare not only between different years at the same company, but also against other firms in the industry and all other publicly-traded firms.

The IFRS is essentially the international version of GAAP. Financial statements in many countries, especially those in Europe, are produced according to IFRS. There are a many areas where GAAP and IFRS diverge, so analysts…

Accounting forms the overall backbone of the financial world. Financial markets are predicated on consumer and user confidence. Without confidence, consumers attempting to make financial decisions will be doing so using inaccurate and incomplete information. The lack of transparency regarding the truthfulness of reported numbers creates uncertainty within the capital markets. This uncertainty regarding the accuracy of information ultimately undermines the overall financial system, causing harm to society in the process. Investors will require higher rates of return, individuals will become unlikely to invest, and innovation could become stifled, harming the quality of life for society overall. Accounting standards, particularly those from the IFRS, are required to help maintain confidence in the reliability of reported financial performance. These standards, such as IFRS , are often amended to reflect the economic realities of business transactions. These changes, although well intended, may often have unintended consequence. This is particularly true for IFRS…

The Statement of Owners' Equity

The statement of owner's or shareholders' equity is designed to show the components of the change in equity from the end of one fiscal year to the next. Beginning with the amount of equity shown at the end of the previous fiscal year, net income is added and cash dividends paid to the owners are subtracted. If owners contributed any additional capitol this amount (such as the sale of new shares) it is added to the equity. On the other hand, if the owners withdrew capitol, equity declines. All the additions and subtractions, taken together, equal the changes in owner equity from one fiscal year to the next (Kurtz, 2010).

The Statement of Cash Flows

Public companies are required to prepare and publish a statement of cash flows. This statement provides investors and creditors with relevant information about a firm's cash receipts and cash payments for its operation,…

Accounting
There are a couple of different issues with the Smith Company statements. The first question relates to the $45,500 worth of products. This would not be recorded as income, because the customer has not committed to the purchase. Revenue recognition rules hold that revenue cannot be recognized until the sale has been finalized (Investopedia, 2013). This revenue must be removed from the income statement. hile the description of the situation is unclear, it appears that this amount was removed from the revenue already, so that the $406,000 in revenue on the income statement is the correct amount.

The next issue is the inventory problem. The inventory account is currently showing $25,000, which was the result of a physical count. There was no adjusting entry to the inventory for the $45,500 that was added to and subsequently removed from revenue. The question appears to be implying, when it should be stating clearly,…

Such adjusting entries will help to improve the accuracy of financial statements. Adjusting entries is necessary because accrual accounting systems demand that the events are recorded accurately. They are not to be recorded strictly on the basis of cash transactions, and all of these adjustments serve to translate the accounting figures that arise from the cash accounting to accrual accounting by incorporating all of the different non-cash transactions and ensuring that every element of the income statement and balance sheet is correct.

On a computerized accounting system, there might be software that can actually make these entries. If not they will need to be entered manually into the system.

As with any accounting, there are certain ethical issues that need to be understood. The accrual statements are where we report our profits and losses. It is important that they are completed accurately. Any fraud is illegal and cannot be tolerated. e have…

Purpose/Perceived Value

The findings of this report will be valuable to two different audiences. The first consists of accounting regulatory bodies. These bodies are working towards convergence and are presently struggling with the resistance from the business community. Understanding the nature of that resistance is key to finding ways of overcoming it. For the large publicly traded corporations themselves, this report will help them understand why they and their peers are resistant, and this will shed light on whether or not that resistance is justified. Convergence is coming whether the corporate world is ready for it or not, but the key for corporations is to understand what convergence is, why it is important, and which elements of their resistance are not worth the effort. For both parties, it is important to work together to make the convergence process as smooth as possible, and that is going to take a greater degree…

Accounting and Intrusion Detection
In a report issued by Paladin Technologies, Inc., entitled: "Security Metrics: Providing Cost Justification for Security Projects," 273 organizations were surveyed on the topic of security. The report illustrates in quantifiable terms the depth and reach of intrusion detection on the financial viability of the organization. The combined reported losses from the firms surveyed totaled $265.6 million in 1999. The highest loss categories were reported as follows:

Type of Loss

Estimated Dollar Value

Number of espondents

Theft of intellectual capital

m

Financial Fraud

m

Sabotage

m

The average annual financial loss of firms surveyed was estimated at $40 million. Forty three percent of respondents were able to quantify financial losses, and seventy four percent were able to acknowledge financial loss. Ninety percent detected cyber attacks within the most recent twelve-month period and seventy percent reported serious breaches other than viruses, laptop theft, and employee abuse of net privileges. As for these categories, six hundred and forty three…

Absence of adjusting entries would most likely to either understate or overstate the accounts in the period of reporting and will have an adverse effect on the following reporting period. This is true except for bad debts or doubtful accounts and depreciation. eing in nature of an expense accounts and valuation accounts, absence of adjustments would overstate the operational performance of the business and at the same time overstate valuation of the particular asset it is supposed to reduce to its realizable value. Such absence would affect only the particular period where adjustment was omitted. To illustrate, salaries and wages of workers should be recorded as expense for the period, even if the actual payment falls on the following period. Failure to record the expense would understate salaries and wages for the year as well as understatement or omission of a liability regarding the same. The effect is an…

Accounting for Postretirement Health Care and Life Insurance Benefits necessitates disclosures regarding an employer's accounting. These include a delineation of the provision of benefits and the groups of employees given coverage, a delineation of the employer's prevailing accounting and financing policies for such benefits and lastly the cost of such benefits acknowledged for the period. In particular, this is effective for the financial statements prepared by organizations for the financial period ending subsequent to December 15, 1984 with respect to postretirement health care and life insurance benefits that are provided not only in the United States but also international nations. Nonetheless, for financial periods prior to June 15, 1985 that lack data and information regarding benefits provided in foreign nations, it is not mandatory to include them (FASB, 2017).
Moreover, the net pension liability or net pension assets have to be included in the financial statements as an asset or liability…

Accounting for Partnerships
Businesses can be classified into various forms of ownership. In this text, I concern myself with partnerships. In so doing, I will discuss partnerships and the various advantages as well as disadvantages associated with this form of business ownership. Further, I will also highlight the Financial Accounting Standards (FAS) governing accounting for this form of business ownership from creation and operation to liquidation. Partnerships' tax consequences will also be discussed.

Partnerships: Advantages and Disadvantages

Just like any form of business ownership, partnerships also do have several advantages and disadvantages. A partnership according to Needles, Needles and Powers (2010) is "an association of two or more persons to carry on as co-owners of a business for profit." In that regard, a partnership is formed when two or more people come together with an aim of initiating a business activity. Individuals may be motivated to start a partnership form of business by…

Accounting and Finance
Henkel AG is a multinational company focusing its brand and technologies in three business areas that include Beauty Care, Laundry & Home Care and Adhesive Technologies. Established in 1976, the company holds its global market positions in both the consumer and industrial products with well-known brands that include Lactate, Persil, and Schwarzkopf. Henkel's headquarter is in Dusseldorf in German and the company has over 47,000 employees globally. Typically, the company is considered among the most "internationally aligned German-based companies in the global marketplace." (Henkel 2012).

Objective of this paper is to use various financial models to carry out financial analysis and valuation of financial Henkel AG.

Valuation Model

One of the methods to carry out the valuation of a company is to use enterprises discounted cash flow (DCF). The DCF could be carried out using WACC (weighted average cost of capital) that represents the opportunity costs that investors will face when…

Accounting for Decision Making
Roland Anderson is the manager of the Ekland Division of Ystad Industries and has some decisions to make based on accounting data. Anderson is also being considered for the CEO position of the company which makes his dilemma even greater. He is unhappy with the profitability for the first quarter and is considering maxing out the capacity of the operation in the second quarter. It was found that Anderson actually performed fairly well based on the assumption that his actual costs were below the variable costs provided in the case using the contribution method. Doubling the production plan would be an unwise move given the fact that the sales forecast is only for twenty five thousand units. Thus if he produces fifty thousand units he would have greater inventory and it is likely that he would have to cease operations and let some workers take a vacation…

Accounting
a) i) Using direct labour hours as the cost driver for the overhead costs, the following table presents the net profit calculation for each line of motorcycle:

Vroom plc

Total Profit

Driver:

Direct labour

Sunshine

oadster

Fireball

Output

DL

P

Materials

evenue

less DL

less Materials

Gross Profit

Less Overhead

Net Profit

Activity-based costing is designed to allocate overhead costs based on the resources that each activity consumes (The Economist, 2009). The key to activity-based costing is that the cost drivers are assigned differently, and in a manner that should better reflect actual resource usage than a cost driver that may be picked almost at random (Investopedia, 2013). Using ABC, the following are the net profit calculations for the three different products at Vroom.

Vroom plc

Total Profit

Driver:

ABC

Sunshine

oadster

Fireball

Output

DL

100000

110000

40000

250000

P

Materials

Deliveries

Set-ups

Purchase orders

evenue

7

8

2800000

less DL

1

1100000

400000

less Materials

400000

480000

180000

less Del

800000

640000

560000

less SU

2

2666667

1

less PO

1750000

1312500

437500

Net Profit

1050000

1800833

-110833

b) Activity-based costing is designed to give a more accurate representation of the costs for each product. The above charts are the net profit calculations using the current managerial accounting and using activity-based costing. These tables…

Accounting and Finance
Comparison of Selected Financial Performance Data for WalMart and Target

WalMart and Target compete in very similar markets, competing in the supermarket segment of the retail industry, with some diversified interests. To assess the performance of these two firms, their results for the financial years ending January 2012 and 2013 may be examined and compared. This paper will look at the performance in terms of revenues, cost of goods, accounts receivable and payable and inventory management.

evenues

The performance of a firm often starts with an assessment of the revenue that is generated and the way in which this changes over time. The revenues for both WalMart and Target are shown in table 1.

Table 1; evenue for WalMart and Target 2012-2013

WalMart

Target

2012(Jan)

2013(Jan)

2012(Jan)

2013(Jan)

evenues ($ millions)

446,950

469,162

69,865

73,301

Change in revenues from previous year

The levels of revenues demonstrate that WalMart is the larger firm; the revenues are more than 6 times the size of Target. However, in…

Accounting
Kaplan and Anderson (2005) notes that activity-based costing (ABC) systems are not as effective in practice as they are on paper. Among the grievances that Kaplan notes with respect to ABC, the system is not very scalable, losing power as the company gets larger. The textbook version is usually a very simple company with a handful of activities, but in the real world companies can have hundreds of products, thousands of activities and tens of thousands of customers. This presents a challenge, because activity-based costing requires a substantial amount of information in order to be effective. Past a certain scale of organization, activity-based costing does not deliver a good return on investment because of the costs associated with gathering and analyzing this information. Kaplan wrote this in 2005, mind you, when perhaps information gathering and processing capabilities were somewhat worse than they are today. Certainly doing ABC manually is likely…

Joint costing systems should bear in mind the legal constraints on the use of such systems, and should provide accurate information to managers in order to be most useful in the managerial accounting context.
Firms need to remain competitive, which indicates that the market will set prices to some degree. This implies that firms can make better decisions with respect to what projects/products they wish to pursue by understanding the cost structure of the product. If the product is not viable at the cost at which it can be produced, then the firm can improve profitability by dumping the product.

orks Cited:

Banham, R. (2000). Off target? CFO Magazine. Retrieved April 5, 2011 from http://www.cfo.com/article.cfm/2990860/c_3046531?f=magazine_alsoinside

Frederick, S. (2011).

The persuasive power of opportunity costs. Harvard Business Review. Retrieved April 5, 2011 from http://hbr.org/2011/01/column-the-persuasive-power-of-opportunity-costs/ar/1

Katz, D. (2002). Activity-based costing (ABC). CFO Magazine. Retrieved April 5, 2011 from http://www.cfo.com/article.cfm/3007694

McKinsey & Co. (2004). Pricing new products. CFO Magazine.…

Accounting and Audit Enforcement 1. The Sarbanes-Oxley Act applies to publicly-traded companies. Thus, it does not apply to non-profit entities. Nor does it apply to for-profit entities that are not publicly-traded. This is because SOX was passed specifically to address instances of accounting fraud in publicly traded companies that were undermining consumer trust in the capital markets (101.com, 2018). A publicly traded companies has a variety of different obligations under SOX that will help to reduce the opportunities and incentives for accounting fraud. Both opportunity and incentive are components of the fraud triangle – one needs to have a perceived need to commit the fraud and the circumstances with which to do so (ACFE, 2018).
Non-profit organizations have no obligations under SOX. However, there is a school of thought that holds that non-profit entities can benefit from some of the recommendations and mandates that SOX contains. Fritz (2016) writes that "non-profits are…

Accounting II
ABC Overall risk profile

The ABC Company may face series of risks based on the current industry and economic issues. First, the company is operating in a competitive market environment making the company to face a fierce competition from other companies producing similar products. Thus, the ABC Company may likely to lose some of its customer to competitors if the price per product is too high.

Moreover, the current recession may affect the purchasing power of customer, which may affect the company annual revenue. Moreover, inflation is likely to increase the cost of production. Another risk issue is that the company should satisfy its shareholders by declaring high dividends and failure to satisfy the shareholder may make some shareholders to disinvest their fund from the company, which may make the company to lose the public image. (Daniel, Njikizana, . & Chamboko, 2011).

Current ABC cash flow using Direct Method

ABC Statement of Cash…

"Management believes that the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates actual results could differ from the original estimates, requiring adjustments to these balances in future periods."
ased on the data retrieved and the projections made, the accounting division will proceed to the development of the consolidated statements for all of GM subsidies and the overall group. There are 24 consolidated statements, as follows: Discounted Operations; Asset Impairment; Investment in Nonconsolidated Affiliates; Marketable Securities; Variable Interest Entities; Finance Receivables and Securitization; Inventories; Equipment on Operating Leases; Income Taxes; Property - Net; Goodwill and Intangible Assets; Other Assets; Accrued Expenses, Other Liabilities and Deferred Income Taxes; Long-Term Debt and Loans Payable; Pensions and Other Postretirement enefits; Commitments and Contingent Matters, Stockholders' Equity; Earnings per Share Attributable to Common Stocks; Derivative Financial Instruments and Risk Management; Fair Value of…

Accounting
The Impact of Distance Learning in Accounting Higher Education

This paper is intended as an Introduction to a research study in to the impact of distance learning on the teaching of accounting in higher education. The context of the research will first be introduced i.e., the background to the research. The research to be undertaken will then be introduced, as will the specific questions and sub-questions to be addressed. The significance of this study will then be analyzed, and the people who are expected to benefit from this research will also be outlined. The research methodology and the practical design of this research methodology will be discussed, and the primary and secondary sources to be used will be introduced, and a list of preliminary resources will be given in the ibliography.

Distance learning has grown in popularity amongst students over recent years, for many reasons, one of which has to be the…

Accounting Information
A senior executive in a Fortune 500 firm along with their colleagues on the company's management team are dependent on accurate, timely, and pertinent financial information regarding the health of the organization. Accounting information has aptly been described as "the language of business, which is used in the management, planning, control, and decision- making processes integral to achieving organizational objectives" (Marshall, D. & McManus, W. 1996). In this regard accounting information falls into distinct categories: financial and managerial accounting; yet with considerable overlap in their utilization by management. Explication of these accounting areas provides considerable insight into their utility in providing effective quantitative data for analysis.

Financial and Managerial Accounting

Financial accounting concerns itself with the "preparation and reporting of financial statements for an entity" (Marshall, D. & McManus, W. 1996); while managerial accounting "is concerned with providing information to managers- that is, to those who are inside an organization and…

The second question is the cost per unit to produce a given product or deliver specific service. Just as the total cost of revenues for a business, this figure will also provide a business owner with insights into how their business is operating, from the supply chain through pricing and distribution of gross margin assumptions (Hall, 2010). The cost per unit to produce is also a good measure of how well the efficiency of a given company is running at. Often a business owner will evaluate these from the standpoint over the long-term, looking for trends in hwo their business is operating at an efficiency level that makes the entire company profitable. For services business, the cost per service event or services deliver (as a plumber making a house call) needs to have a minimum charge level as costs are allocated across all forecasted calls in a given month. This…

Accounting
A static budget is defined as a budget that is "planned ahead of time based on the owner's best guess about future actual activity." This type of budget is therefore put together for the upcoming time period, and is often based on the data from past time periods, plus or minus different adjustments that management thinks will be necessary. In contrast, a flexible budget is one where the business management can make changes in the midst of an accounting period. Flexible budgeting allows for management to make better decisions on the fly, because the information used in those decisions is kept more up-to-date. Static budgeting relies only on the ability of management to analyze the numbers after the period in order to determine the magnitude and direction of variance, along with the causes of variance. For a flexible budget, management can identify issues with the budget right away, and take…

Accounting
Operating income it typically defined to include all operating expenses other than depreciation and taxes (Investopedia, 2011). Because the airplanes are leased, there is no depreciation for West Coast Airlines to take into consideration anyway. The operating income is as follows:

evenue

AVG Passengers

Variable fuel

evenue/pass

Food & Beverage

F&B/pass

Fixed Lease

Ground Services

Flight Crew

Operating Income

The company right now is losing $31,012.50 on every one-way flight to Fiji.

If the company lowers the cost of the flight in order to generate an increase in volume, the operating income figures will look as follows:

evenue

Avg Passengers

Variable fuel

14000

evenue/pass

Food & Beverage

F&B/pass

Commission

Fixed Lease

53000

Ground Services

Flight Crew

Operating Income

-28924

By these figures, Fiji Air loses $28,924 per one-way flight with the lower ticket price and the higher average number of passengers. The bigger issue is that even under this scenario, the company loses an incredible amount of money per flight. It would appear that the bigger problem is the lease per flight. The lease is a fixed…

Another factor that should be taken into consideration is that of overall strategy. Financial statements are snapshots, and sometimes it can be difficult to discern from looking at a small sample of them the firm's overall direction. Key strategic decisions can have a significant impact on the financial statements for a limited period of time. For example, during the period studied FedEx was having trouble absorbing Kinko's which it had purchased. These difficulties are not fully reflected on the income statements for 2005 and 2006. Instead, they appear as an unusual item (a writedown) in 2008. Likewise, UPS took a $6.1 billion writedown in 2007, which made the financial figures for that year look terrible. There is always strategic context in financial statements. That context is not always readily apparent, but it should be taken into consideration when analyzing the financial statements.

The potential impact of mergers and acquisitions should also…

, 2010). Where there is the sale of shares, there is also a great potential that the existing owners will have little control over who the shares are subsequently sold to, especially in a quoted company. The firm will also be subject to the Sarbanes-Oxley Act (SOX), which was also known as the "Company Accounting eform and Investor Protection Act," in the Senate (Libby et al., 2010).
3.

Decision for the Business

As the business is a new idea, and will initially only involve a single person, the idea of a partnership may be eliminated. This leaves sole proprietorship and corporation. If there is to be only one owner the S-corporation may be used, as this may accommodate a single shareholder. This structure may be attractive as the business will be a separate entity, especially as the owner will not carry any personal liabilities for the business debts. However this is costly to…

CVP is very useful for small business also because the analysis takes
into consideration variables like eturn on Investment, or Customer
Acquisition Cost. This analysis allows the company to determine what the
maximum profit volume can be, and how the above mentioned variables can be
changed in order to become successful.
CVP analysis is also able to determine the results of media campaigns,
especially for small business, where results are more visible and can be
observed after a shorter period of time. Furthermore, these results can be
translated into a successful company strategy, given the fact that the
strategy would be based on verified results. In relation to this, market
share can increase due to such a strategy.
For small business, CVP analysis is also used in establishing the
company's budget for certain activities. The analysis is able to provide a
flexible budget variant, which is exactly what a small company needs, given
the fact that environmental changes affect small companies more than they
affect…

Accounting
Operating Leverage, Return on Investment, Economic value added and Net Profit Margin at Yum Brands

A firms performance is often measured using ratios. There are many different ratios which are used, all indicating different types of performance measurement; four of these measures are operating leverage, return on investment (ROI), economic value added (EVA) and net profit margin. These all provide the ability to perform historical assessment to assess the trends or patterns in the firms' performance when measured against itself, as well as allowing the firm to be assessed against other competitors or potential alternate investments. Each of the ratios will be examined and considered in the context of Yum Brands

Operating leverage

Operating leverage is a ratio which shows the companies fixed coasts to variable costs. To calculate the ratio it is necessary to have details of the fixed and the variables costs for the items produced. The equation to calculate the…

Accounting
The lease on the building is for two years, so it is highly unlikely that this is a finance lease. It does not appear that the Large Mart is going to take ownership of the building. Thus, since this is not a finance lease, the journal entry would simply record the rent. There is no opening entry, just an expense.

621 Rent Expense

101 Cash at bank

The wages show as a journal entry at the end of the month. Because the employees were not paid, the wage expense shows as the creation of a liability. The liability account is later offset when the two are paid.

624 Wage Expense

204 Wages Payable

204 Wages Payable

101 Cash at Bank

Well the first to do is have a chat with the audit department about that $12,000 trip to China. It does not cost that much, unless he's buying some luxury on the company dime, which if I'm in…

Rational people think on the brink of the margin. This means that a rational decision-maker takes action if and only if the marginal benefit of the action exceeds the marginal cost. People tend to always respond to incentives. Behavior often changes when costs or benefits change (Principles of Economics, 2006).
People make decisions based upon two things. hat they are going to get out of the decision and how much is the decision going to cost. People weigh decisions by comparing the marginal benefits against the marginal costs (Marginal Analysis, n.d.) And since people strive to get the most bangs for their buck, making less risky and thus less costly decisions will most often win out. The economic system as a whole relies heavily on the fact that people are going to take some risks and make some decisions.

orks Cited

"Marginal Analysis." n.d. 16 May 2009

http://sorrel.humboldt.edu/~economic/econ104/marginal/

"Principles of Decision Making." n.d. 16…

b. An issue of bonds that is sold simultaneously in several countries is traditionally called a (n) eurobond.

c. If a lender ranks behind the firm's general creditors in the event of default, the loan is said to be subordinated.

d. In many cases a firm is obliged to make regular contributions to a (n) sinking fund, which is then used to repurchase bonds.

e. Most bonds give the firm the right to repurchase or call the bonds at specified prices.

f. The benchmark interest rate that banks charge to their customers with good to excellent credit is generally termed the prime rate.

g. The interest rate on bank loans is often tied to short-term interest rates. These loans are usually called floating-rate loans.

h. Where there is a (n) private placement, securities are sold directly to a small group of institutional investors. These securities cannot be resold to individual investors. In the case of a…

Accounting Information for Decision Making
Corporate Confirming on Water isk (Feb 2010) indicates that the Global Confirming Initiative (GI) G3 Guidelines' five water-related indications (total withdrawal volume by source, ponds considerably impacted by distributions, percentage and total amount of water recycled and used again, total water discharge by quality and destination, and identification water physiques and related habitats impacted by discharges) make the perfect beginning point for assessing and confirming water risks. Within this section, we'll briefly discuss the relevance of all these standards (Power, 2010).

Total water withdrawal by source

Confirming the entire amount of water withdrawn by source adds for knowledge of the general scale of possible influences and threats connected using the company's water use. The entire volume withdrawn offers an indication from the organization's proper size and significance as a user of water and offers to set up a baseline figure for other information relevant to efficiency and employ…

Further, Oracle also has templates and process definitions for the electronics components market as well. Lastly the financial modules with Oracle can also be used for local government reporting in addition to SOX compliance.
For the small business of $2M their needs are drastically different than the $100M distributor that has offices across multiple geographies. The $2M company for purposes of this example is a manufacturer of air conditioning spare parts and is heavily manufacturing based. Their customer base is primarily throughout the U.S. Their primary need is for an accounting system that can has Accounts eceivable, Accounts Payable, General Ledger, Billing, Inventory Management, distributed order management and sales order management, all core functions of an accounting system (Collins, 2006). In addition this small manufacturer also needs support for Debt Collection, electronic payment processing, online payroll, timesheets and purchase requisition as well. All of these features can be found in…

When there is an overrun in an electrician's contractor fees or some other issue that is not controlled by the project manger, the project could come in over budget and cause additional cost-control problems.
Poor estimating of an original wiring scheme for example could create delivery delays or a need to push a project's wiring portion into an unacceptable overtime scenario. Thus, any unforeseen delays push costs and the project out of control. This means that responsibility budgeting for the organization requires the project manger to be able to establish deadlines and insure that each project meets its deadlines under or near budget. When this occurs, each satisfied customer usually provides a plethora of positive word of mouth advertising for future projects. Late or over budget projects usually entail the company receiving some verbal or written complaint that stains the company's reputation in the business community.

In conclusion, this report detailed…