Essay Discussion Questions

Submitted By yvet5plus
Words: 665
Pages: 3

Yvette Williams

ACCOUNTING FOR MANAGERS

ACC360

The use of Managerial Accounting in Planning and Control

Mr. Jackie Russell, JD

May 11, 2013

Introduction

This summary paper is to speak about systems designs and incorporate job order costing,

activity based costing and process costing as I discuss these different elements. I will also

discuss cost volume profit and its relationship between cost, profit and volume.

Approaches to break-even analysis will also be apart of this summary. Benefits to be gain

from budgeting , the impact of ideal versus practical and methods of capital budgeting.

Systems Designs

When labor, material and overhead are applied to products that are different, because of

how much each production material is used, it is called Job Order Costing. This type of

costing is used in hospitals, production of clothing, and places where things are repaired.

As work is performed, direct and indirect labor cost is charged to each job. Instead of

being directly traced to each job, manufacturing overhead are allocated to jobs. Activity

Based Costing works just like the job order costing, the purpose is to accurately assign

overhead cost for financial reporting and other use. Process Costing, is an individual

manufacturing process. It is a system where a single product is produced for a long

period. The production of goods like flour through repeated process would be an example

of process costing.

Many jobs are worked on during the period of job order costing. During process costing

one product is produced for along time. Cost are accumulated by individual jobs when we

talk about job ordering costing and cost are accumulated by department when it comes to

process costing. With job order costing, unit cost are computed and produced by job and

process costing unit costing are computed by department or a particular operation.

Cost-Volume-Profit

Cost, volume and profit is a vital tool in many business decisions, like what to sell or

Manufacture, what the price should be, how to market and what type of facilities to

aquire. Cost is what you pay on the product, volume would be the amount of product and

profit would be the amount you made over cost. The breakeven point is just that, you

didn’t lose but you didn’t gain anything. The breakeven point can be a helpful tool to use

to know the sales needs to attain a specified amount of profit. This point has a lot to do

with what your cost are how much you have on hand and your gross fit. Cost, volume,

profit, and…