Contractors need to exhibit their proficiency in cost accounting procedures and prove their compliance with requisites set forth by the government. Those who manage to accomplish this effectively and implement it on their strategies, business models and workflows get acclimated to any new requirements and hold an advantage over their opponents (Tinsley, 2010)
Its categorization depends on the contractor and the complexity of the accounting mechanism. General and Administrative (G&a) costs are the commonplace expenses which cannot be assigned to any specific department, such as expenditure on the workplace (Huber, 2010)
Why use Activity-Based Costing ABC has grown in importance in recent decades because overhead costs have increased significantly and the overhead costs no longer correlate with the productive direct labor hours. The variety of products and the diversity in customer's demands have grown and some products are produced in large batches, while others are produced in smaller ones (Averkamp, 2009)
The traditional cost accounting methods were designed around the 1870's -- 1920's and in those days industry was labor intensive; there was no automation; the product variety was small, and the overhead costs in companies were generally very low compared to today. However, from the 1960's to particularly the 1980's - this changed rapidly (Emblemsvag, 2008)
ABC represents an alternative paradigm to a traditional cost accounting system and has received extensive attention during the past decade. Rather than distorting the cost information by using traditional overhead allocation methods, it traces the cost via activities performed on the cost objects (production or service activities) giving more accurate and traceable cost information (Tuncel, Eren, Bayhan, & Koker, 2005) It doesn't change or eliminate any costs; it provides detailed information about how costs are consumed (Activity-based costing (ABC), n
g., depreciation from robotics and other automated manufacturing systems) had grown in significance but was not easy to measure since the same systems were used by multiple products (Weiner, 1995)
ECD eliminates the ambiguity created by allocating costs -- thereby eliminating overbidding, unreliable predictions, and inflexibility. The ECD approach creates a costing system that cannot be manipulated to make performance numbers appear better, is well-suited to "what-if analysis," and is far simpler than allocation-based models (Yu-Lee, 2001)
¶ … 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)
For with the same measure that ye mete withal it shall be measured to you again." Luke 6:38 (Fooshe, N
Maybe one of the most fundamental principles that supports this notion would be the golden rule. Decision-making in cost accounting with a focus on ethics (Accountability/Responsibility part of it) he ethics of a business is currently a high profile issue owing to sensational corporate scandals that had taken place in many countries causing extensive damages to the economy and society; these corporate scandals question the morality of businessmen in general and accountants in particular (Senaratne, 2011)
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
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)
TA thereby leads to optimal decision making. Using a (TOC) framework, TA measurements can be more effectively used for various optimization decisions than cost-based systems that treat all areas of production as equally important (Aghili, 2011)
Following a period of growth and acquisitions, ALL struggled with the inability of the company's old system to provide good quality information to facilitate accurate, timely and well-informed business decisions. The company's SAP implementation, which initially provided extensive operating detail but no cost detail, required significant enhancements to perform the needed changes to make its cost accounting system more effective (De Modesti & Eriksen, 2008)
GPK was more popular with chemicals/paper/printing, wholesale/retail trade, and construction/mining industries. GPK adoption was also more likely to be found among companies with higher levels of information systems integration and quality, higher proportional costs, low-cost competitive strategy, an emphasis on management accounting, and strong use of budgeting systems, profitability analysis, and transfer pricing (Krumwiede & Suessmair, 2008)
ABC, when used to prioritize production, is valuable for its ability to trace the costs of activities to products. However TOC is a better method under several conditions, particularly for companies looking to invest in environmentally sound resources while at the same time maximizing their profits (Lockhart & Taylor, 2007)
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
Cost accounting is a valuable tool you use to reduce and eliminate costs in a business. You also use cost accounting to determine a price for your product or service ...
Cost Accounting Jobs. Cost accounting is a facet of management accounting that determines the actual cost associated with manufacturing a product or providing a ...
Cost accounting is a process of collecting, recording, classifying, analyzing, summarizing, allocating and evaluating various alternative courses of action ...