Compare the job order costing and process costing

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Reference no: EM132337729

Management Accounting

LO1. Be able to analyze cost information within a business

1.1 Classify different types of costs

- Classify all types of costs in business such as direct material, direct labor, manufacturing overhead (indirect cost), manufacturing cost (product cost),non- manufacturing cost ( period cost), sunk cost, opportunity cost, fixed cost, variable cost, mixed cost, differential cost.

- Company’s introduction (background, mission, vision, culture, etc.)

- Apply to your chosen company by listing all the above types of costs.

1.2 Use different costing methods

- Discuss job costing; process costing; contract costing, service costing method.

- Compare and contrast between Job order costing and Process costing and give suggestions which types of business should use which costing method.

- Give practical evidences to support.

1.3 Calculate costs using appropriate techniques

- Compare the cost calculation between absorption costing and marginal costing.

- Compare the cost calculation between traditional overhead absorption and activity-based costing.

- Stock valuation methods (FIFO, LIFO, AVCO, Standard costing).

- Evidence in your chosen company and compare with other company. Demonstrate the advantages and disadvantages of each costing method.

1.4 Analyse cost data using appropriate techniques

- Discuss the basis of pricing and stock valuation (cost plus pricing; market pricing; target costing).

- Data collection and analysis: sampling methods and purpose; presentation of data e.g. tabular, diagrammatical, graphical; index numbers

LO2. Be able to propose methods to reduce costs and enhance value within a business

2.1 Prepare and analyse routine cost reports

- Preparing the production cost report

- Analyse the production cost report ( compare and contrast with other data, explain and implication of variance

2.2 Use performance indicators to identify potential improvements

- Identify the performance indicators to reduce the cost, enhance the business’s value in general

- Discuss how managers use the production cost report and identify the company’ production problems through this report.

- Practical evidence in your chosen company.

2.3 Suggest improvements to reduce costs, enhance value and quality

- Suggesting the solutions to reduce cost and increase value (added value, total quality management)

Reference no: EM132337729

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