Accounting for leaders
During week four you studied process costing and saw how this cost accounting system varied from job order costing that you learned about in week three. For your week four discussion board post I would like you do identify a publicly traded manufacturing company. BY publicly traded it means they have stock traded on an exchange such as the New York Stock Exchange. I would then like you to research a product they manufacture. Based on what you have found would they use process costing or job order costing. Why did you select the method they did. Please be sure to integrate terms and concepts you learned about in week three and four as you describe the cost accounting system they might use.
Two replies to your peers
Peer 1:
Activity Based Costing:Which is called an ABC method. Activity based costing is allocating the overhead and indirect costs of the operating business to the products that are being produced and also the services for all the activities and events. ABC is an effective way for an organization to have the transparency between cost and the results that make profits or loss of the products or customers or the processes.By understanding the activities and processes, the cost drivers that influence the cost of the activity, and whether the activity is needed at all, you can analyze the cost of making items and how to eliminate unnecessary steps.Yes, Jackson is absolutely acting ethically. Jackson developed a new costing using Activity Based costing where he can save plenty of money when compared to the deluxe model costing. Every employee should follow the standard ethics.No, Jackson’s friend Alan is not really acting ethical to his company. Despite of knowing the savings that could be made for the company he tried to stop Jackson and asked him to quote higher price so that he can save his job. The one who is working for personal cause is not ethical to the company he is working for.Well, Jackson’s ethical obligations should be to the President of the company by any means, if Jackson is trying to help his friend or making adjustments to what Alan asked for would also make Jackson unethical towards the president or the company. Refernce:https://docs.oracle.com/cd/A60725_05/html/comnls/us/cst/abc01.htm#c_abcdefhttps://www.tagetik.com/us/glossary/activity-based-costing-abc
Peer 2:
Summarizing of Activity Based Costing (ABC) Concept: ABC is a costing method helps in identifying the activities in organization and assigns the cost for each activity to all products based on actual consumption by activity. The activity-based costing process includes following steps:Identifies activities and activity poolsEstimates costs to activities and cost objectsAssignment of costs to activity cost poolsCalculate activity costAssigns cost to cost objectPrepares reportsBenefits include: This method provides more accurate method of product costing which in turn leads to accurate pricing decisions. Increases the understanding of overhands and cost drivers and makes visibility high for the non-value adding activities.CASE 5-70:1. Is the controller, Erin Jackson acting Ethically?Jackson was acting Ethically in perfect manner, because even after knowing her friend would be in trouble when real numbers come into picture but even then she dint even hesitate to move in the right path by compiling data and provided perfect report.2. Is the production manager, Alan Tyler acting ethically? No, Production manager dint even gave the thought of following ethics. He was just concerned about his job and not thinking how company will get effected further if they follow the old costing system. And even tried to manage Jackson to manipulate the numbers in a way such that making her even non ethical.3. What are Jackson’s ethical obligations? To the president? To her Friend?Jackson has ethical obligations only to president and not to her friend. Jackson has the obligation to generate report that should not be biased for president to allow for accurate decision making. References:https://www.cgma.org/resources/tools/essential-tools/activity-based-costing.htmlhttps://www.business-case-analysis.com/activity-based-costing.htmll
