Consortium www.irjcjournals.org 1 The Impact of Cost Control on Manufacturing Industries’ Profitability Siyanbola, Trimisiu Tunji, Lecturer in Accounting, Babcock University, Ilishan Remo, Ogun State, Nigeria. Raji, Gbolagade Mojeed, Lecturer in Accountancy at The Polytechnic, Ibadan. ABSTRACT Cost control is of utmost importance in every business concern, the negligience of which will affect the earnings at any point in time. In controlling costs, wastage is eliminated during the course of production
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| |Activity-Based Costing | |Product/Cost Relationships | |
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4-1 Traditional cost accounting systems assign operating expenses to products with a two-stage procedure: 1. expenses are assigned to production departments; 2. production department expenses are assigned to the products Departmental structure influences the first stage allocation process. Production Departments refer to departments that have direct responsibility for converting raw materials into finished products. Service departments perform activities that support production such
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costing (TC) for parts costing in flexible manufacturing systems (FMS) with the A(2) level of automation. We propose a new model for the implementation of ABC using the product cost tree concept. First, the required resources and activities for each part are recorded, and then their costs are calculated using the appropriate cost formulae. This model was applied in a forging industry. A comparison and analysis between ABC and TC was then carried out based on the computational results obtained from the
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Cost Accounting Systems 1. Cost accounting involves the measuring, recording, and reporting of product costs. From the data accumulated, both the total cost and unit cost of each product is determined. 2. A cost accounting system consists of accounts for the various manufacturing costs. These accounts are fully integrated into the general ledger of a company. An important feature of a cost accounting system is the use of a perpetual inventory system. Such a system provides information immediately
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budgeted target. The manufacturing costs will certainly increase as depreciation cost of the new machine will be included in the manufacturing costs. Therefore, it raises the total costs of the production line. Moreover, the application of the new machine will also lead to a different cost allocation approach to Fabrication and Assembly department. In fact, based on Sino “Product and department estimates”, we assume that Fabrication will use machine hours as cost driver whereas Assembly department
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This case contrasts a standard cost system with an actual job cost system, and thereby brings out several points about cost accounting, including: the purposes for which cost accounting data are used; the paperwork involved in cost accounting; the use of costs for pricing; the problem of controlling costs under the two types of systems; and the problem of the normal overhead rate. Students may have difficulty in seeing that: (1) in the Conley standard cost system, costs are not traceable to individual
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(PTC)? Consider carefully the differences between the reported costs and costs relevant for decisions that Daniel Rowe is considering. The current data indicate that the PDS is in operating loss. And going by the presented data, yes, PDS is a problem to PTC at this point of time. And this in spite of many major costs being absorbed by PTC while charging a sum towards corporate services to PDS. However the way data was collected, costs calculated and presented could be different from the actual reality
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Individual Summary Project Managerial Finance and Accounting 12/04/2014 Summarize situation at Merced Home Products: Stacy Cummins, a newly hired controller, was concerned about some information she has come across at the Home Security Division of Merced Home Products, Inc. She has found that the past several years of quarterly income statements were adjusted to make each successive quarter increase its profits, resulting in total annual profit which exceeded targeted profit for the year
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rooted from the 1970ies, were a novel way of assigning costs more accurately to cost objects. As R. Cooper and R. S. Kaplan brought notice to these concepts, they stressed its main innovation: assigning the direct and indirect costs of each activity to products based on the resources they consume. In contrast, the traditional costing system assigned overheads in proportion to an activity’s direct costs1, which would oftentimes distort the real costs incurred by a product. The reason is that if product
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