Essays on Costing Methods

Report on Sierra Ltd.

Report on Sierra Ltd.

Introduction

This report will assess the dip in profit of the Sierra Ltd. and will closely monitor the current costing and pricing strategies. It will also assess whether the activity based costing is suitable for the company or not. On further, if activity based costing is implemented, the steps that should be taken by the management to ensure the implementation will also be analyzed. Mr. Kaur’s suggestions will be deeply assessed to ensure if going along his way is safe and profitable. The important concerns of the Sierra Ltd. are due to the refinancing to ...

Introduction

This paper explores the costing and pricing methods applicable to firms in the tourism and travel sector using Allegiant Travel Company as an example. Allegiant Travel Company is an American company providing leisure travel products and services to under-served cities in the US. It provides air transport, air transport-related products, travel protection products, hotel rooms and other third party travel products. The paper also analyses the financial statements to assess its financial state.

Costing methods

Several costing methods can be applied in the tourism industry depending on the nature of the assignment and the operations of the organization. Applicable costing methods ...

Managers as well as accountants need financial information to help them make managerial and accounting decision that are very crucial for both internal and external consumers of this information (Drury 2008). To be successful in this area both managers and accountants need to have full understanding on the different types of cost and their calculations. There are different ways of classifying cost for example, manufacturing costs verses Non-manufacturing costs, fixed costs versus variable cost and finally product cost versus period costs. The most important thing that managers and accountants need to know is how to treat variable costs and ...

1- (A) - Fixed manufacturing overhead costs are defined as a product cost and period costs under absorption costing and variable costing respectively. This is the only difference between these two costing methods.

(B) - The actual difference between the cost of goods sold and sales gives the value of gross profit (gross margin). Fixed and variable manufacturing costs are part of the cost of goods sold. On the other hand, contribution margin is determined by sales amount less of variable expenses such as variable operating expenses and variable cost of goods sold. Fixed costs are not considered in the ...

In the traditional methods of absorbing overheads, the costs were allocated to the various products based on the production output, sales, head count or the square foot occupied by product operations. There are several disadvantages of traditional methods. First of all, it leads to under costing and over costing of the products. Due to the arbitrary allocation of overheads by sales or production output, the company is not able to see the hidden costs and profits of the different products. It also distorts profitability analysis. Furthermore, it causes the manager not to pay attention or particular detail to the ...

This report comprehensively discusses the significance of keeping financial records and how financial information available in the financial statements of an entity help wide range of stakeholders in assessing company’s performance to make viable economic decisions. Moreover, as follows the report also defines the budgetary control process and different costing methods and their effects on short term and long term performance of the business. I would also like to discuss the statutory requirements of recording and reporting financial information for entities operating in the United Kingdom. There are several reasons for companies to retain their financial records. ...

Allocating Fixed Costs

Allocating Fixed Costs Activity Based Costing (ABC) is different from the other traditional costing methods. The traditional costing methods, such as marginal and absorption costing methods, has only two absorption basis. These two absorption basis for the allocation of overheads are labor hours and/or machine hours. However, in Activity Based Costing, every cost unit has a separate cost driver to allocate the overheads more effectively and efficiently. The activity based costing is a more refined method of allocating the overhead costs and separate the loss making products from the profit making products. Therefore, as compared to the traditional costing methods, ...

Introduction . 3

Overview of Company. 5 Activity Based Costing 6 Standard Costing .. 9

Future Projects . 10

Summary and Conclusion 11 Reference .. 13 Introduction It has always been the objective of the firm to encourage cost minimization as possible so as to enjoy the benefits of increased profitability which is the ultimate goal of many organizations. However, it is also prudent to note that these organizations would be required to make a choice of the most efficient costing methods to be adopted in the organizations business operations. Hence, the study shall undertake an in depth research so as to ...

Abstract

Historical cost accounting refers to the accounting method in which only the original costs of assets, liabilities, revenues or expenses are recognised. This means the method is silent as to the effects of depreciation, inflation, time value of money among other things. Much of the arguments for and against the historical cost accounting method can be divided into two, academic and practical reasons. The academic arguments resonate around issues of integrity and rationality while practical argument consider the fact that decision making uses accounting information and the overall need for accuracy in decision making. Its pros include the fact ...

Apple Inc.

Apple Inc. is a manufacturing concern in the electronic industry. Apple Inc has its headquarters in the United States of America. It produces a range of electronic products ranging from hardware products like the Mac personal computers, iPads, iPods and iPhones. Its software products in the market include the following: the OS X and the iOS operating systems and iTunes music browser, iWork and iLife creativity suites. The company operations span the entire globe. Apple Inc. had three hundred and sixty four retail outlets as at July 2011. In addition, Apple Inc. runs a successful online retail services that operate in the entire ...

Introduction to Coca-Cola Company

Coca Cola Company has recognition as one of the leading multi-national marketers, producers and distributors of non-alcoholic beverages, refreshments, concentrates, and syrups in the United States. Coca Cola Company is recognized for its strong name and brand portfolio which has enabled the company to maintain its position in the listing of the top 100 brands since 2007. Currently, Coca Cola Company enjoys a massive growth rate, boosted by acquisitions and mergers with other firms in the beverage industry. The company has a strong linkage between its strategic goals and mission statement and vision, which has enabled the multinational company to acquire a competitive advantage ...