...Costing Methods Paper Amy Buckley University of Phoenix Bellevue Campus ACC561 April 2012 Instructor: Solomon Seyoum Costing Methods Paper Understanding and selecting the optimum method of cost accounting is vital to a company’s success and sustainability. Two types of costing methods are available: the traditional cost accounting method or the activity based cost system. Each delivers pros and cons; therefore each company may choose one or the other. The traditional method matches the indirect costs to the volume based products, the hours of direct labor, or the hours of machine production hours (Accounting Coach, 2012). Activity based accounting products eat up activities and lead to consumption of resources. Activities are cost drivers and may not lead to a large number of products being produced. Therefore; distributing costs fall under the following: taking an order, customer challenges, and implementation of new hardware. This provides the company with a clear understanding of: the arrival of a profit, the outflow of money, and the departments of cost reduction (BusinessDictionary.com, 2012). Traditional costing methods versus an activity based cost system, a choice Super Bakery Inc. would review again. Strategies Super Bakery Inc. launched approximately 30 years ago into the food industry. Breaking into the market was slow and challenging; therefore the company developed four strategies to rise above the competition. Super Bakery selected...
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...Small Business Start Up Christopher Blasdel Accounting/ACC561 November 14, 2011 Julio Jimenez Small Business Start Up Starting a new business can be a daunting task but the end results can be incredibly rewarding. New business owners are the foundation for our capitalistic economy and without them, such organizations as Wal-Mart and Macy’s would never exist. In this paper, we will examine the four different forms of business organization, weigh their strengths and opportunities, and identify the best type for a future individual business venture. We will start by examining the four types of business organizations. “According to the U.S. Census Bureau, small businesses are responsible for over half of the private sector workforce, 50 percent the gross domestic product, 90 percent of exports and innovations, and 90 percent of net new jobs” (Anderson, 2004). The most basic type of business organization is the sole proprietorship. In this style, the business is typically owned by one person. The advantages of a sole proprietorship are autonomy, independence and full decision-making abilities. Since there is one owner, there are no shareholders or boards of directors to work with in steering the direction of the organization. The downside of a sole proprietorship is that all tax implications fall on the owner. This includes all profits made, losses recognized, and all liabilities and debts. For one person, this may be a very expensive venture and if the organization has...
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...which of the four forms of business the organization will best fit with the new owner’s ideas. In addition, the business owner will need to review all tax legalities and implications associated with the different forms of business for her organization. This paper will discuss the four forms of business and the different types of financial statements associated with the forms of business in relation to consequences of taxes, liabilities, and accounting implications. Sole Proprietorship Sole proprietorship is the most common and easiest form of business to create. Some of the benefits of a sole proprietorship are that the owner can make decisions of hiring and firing employees, decisions of which vendors to use, what materials and equipment to purchase and what direction they want the business to take. A disadvantage is that the owner is limited to funds as a sole proprietor can only access the funds that are available. In addition, the sole proprietor is responsible for all liabilities associated with the business. The financial statement associated with at sole proprietorship is the statement of cash flow. The statements of cash flows provide financial information regarding cash receipts and payments of the organization in a specific period of time. This is important because lenders would like to see the amount of cash the organization has. This will determine if vendors will grant credit to the business or establish a credit limit for a loan from a bank. Because a...
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...Client Understanding Pa Accounting Theory and Research/ ACC561 October 1st, 2015 Prof . Paul Vilaro Nelms Client Understanding Paper As part of the analysis carried out within the accounting entries will be explaining and analyzing the following issues for the customer. Adjusting lower cost of inventory on market valuation, interest Capitalizing on building construction, Recording gain or loss on asset disposal and finally the theme adjusting for goodwill impairment Adjusting lower cost in market inventory on valuation Inventories are necessary for companies because it is a fundamental part of the business operation. They seek to retain control of the articles of tangible property of a company. These items range from the material for the production process to be in-assembly and used as part of a sale, must be counted and recorded in the books. The valuation of inventories is of great importance for two reasons. First, generally they constitute an important part of current assets which means that this has a significant impact on working capital. Second, inventory valuation has a major impact as the amount is reported net profit for companies. There are various methods of conducting the inventory and turn the registration ledgers. Generally Accepted Accounting Principles (GAAP) teaches that when inventories decreased in value to future sales price should move in the same direction at the same time There are various methods for carrying the inventory. One is the perpetual...
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...purpose of this paper is to define the advantages and disadvantages of the four different forms of business organization, including sole proprietorship, partnership, C corporation, and S corporation. The paper will define the different types of financial statements associated with each form of business organization. The paper will also define the consequences of Tax implications, Legal implications, and Accounting implications associated with each form of business organization. Furthermore, a business will be selected in the paper of which an explanation of the unique product or service will be provided. Sole Proprietorship: It is the easiest and general sort of business to establish. A number of assistances of this business include the decisions of firing and hiring workers, assessments of selecting the vendors, what equipment, and materials to buy and what directions he or she is willing the business to take. A drawback of this form of business includes the limitation of funds because the owner can only access the available funds. Furthermore, the sole owner is accountable for every obligation related to the business. Statement of cash flow is the financial statement that relates to sole proprietorship. Financial information concerning business cash payments and receipts in a particular time is provided by the...
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...Cost Analysis and Control System: Guillermo Furniture Store Accounting/ACC561 October 04, 2010 Cost Analysis and Control System: Guillermo Furniture Store Guillermo Navallez (Navallez) has several important decisions to make regarding the future of Guillermo Furniture Store (GFS). Computations of return on investment, residual income, economic value-added data, and break-even analysis provide insight for decision-making and development of optimal performance measures. Choosing the most lucrative course of action requires analyzing cost relationships and behaviors, developing a management control system that helps set production standards and goals, and ties managerial efforts to organizational goals. Measures of Profitability GFS measures the performance of the organization by linking balance sheets from previous periods in 2008 and matching its sales, cost of goods sold, and other expenses in its income statement for June 2008 (see Table One). The table includes return on investment (ROI) ratio, residual income, and economic value-added (EVA) amounts that measure investment-center performance. Table One Return on investment (ROI) is a measure of financial performance defined as income divided by the investment made to earn that income (University of Phoenix, 2010, Week Six Supplement). The calculated rate of ROI uses percentages as a means of simplifying comparisons between different sizes of investments within the organization, and between different...
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...3 711 Chapter Tax Accounting TRUE-FALSE QUESTIONSCHAPTER 13 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. A partnership may adopt any tax year without IRS permission. A corporation ling its rst return must annualize its income if the tax period is less than 12 months. A taxable year may be as short as one day and may exceed 366 days. Under no circumstances may a corporation change its scal year without IRS permission. A taxpayer engaged in two or more separate and distinct businesses may use different accounting methods for both businesses. A grocery store may use the cash basis of reporting sales. In general, a CPA on the cash basis method will never have a bad debt deduction. A cash basis taxpayer may deduct prepaid business expenses currently. Both cash and accrual basis taxpayers will be taxed on a dividend when it is actually received. Computing cost of goods soldand being on the accrual basis are independent of each other. If, in the IRSs opinion, the taxpayers books do not clearly reect income, the IRS may revise them so that they do. Taxpayers must generally obtain the permission of the IRS to change accounting methods. A correction of an error in a tax return is usually considered a change in accounting method. The IRS can require a change in accounting methods if the method used by a taxpayer does not clearly reect income. IRS permission is not required for a change from FIFO to LIFO. The installment method cannot be used unless the total selling price...
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