We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Cost Accounting and Management Decisions - Assignment Example

Comments (0) Cite this document
Cost Accounting and Management Decisions Name: Institution: Ford Motor Company Description Henry Ford founded Ford Motor Company in 1903. Headquartered in Dearborn, Michigan, the company mainly produces three products automobiles, commercial vehicles and automobile parts. Ford is currently the second largest U.S based automaker but the fifth in the world…
Download paper
Cost Accounting and Management Decisions
Read TextPreview

Extract of sample
Cost Accounting and Management Decisions

1). Management of this company believes in ranking the automobiles by the quantity of contribution margin earned for internal decision-making purposes. They view direct labor, direct material, and the variable manufacturing overhead as product costs while fixed manufacturing overhead as period costs (Hicks, 2002, p. 36). A major change in the company’s manufacturing has been conversion of most of the plants to produce smaller cars instead of the bigger cars that are seen as fuel inefficient. In the recent past, Ford Motor Company has concentrated of production and sell of small cars that achieve higher mileage on less fuel. This strategy has been influenced by the desire to cut on the global air pollution, something responsible for the global warming. The current global challenges have made the company embark on manufacturing varieties of the automobiles to ensure that the costs are balanced. For this reason, management has lately discouraged any production of goods that do not produce adequate sales to cover up its variable manufacturing costs (Weygandt, Kimmel and Kieso, 2011, p. 23). The company has maintained the main manufacturing lines of cars, trucks, buses, tractors, and their spare parts. Ford’s success motorsport has been evident in their ability to manufacture rally cars, stock cars, formula one, sports cars, as well as touring cars. It is also important to note that the company has maintained its presence in all parts of the world, having assembly lines in many countries in order to serve many regions. Changes in the Variable/Fixed Cost Structure of the Company on Cost-Volume Analysis Decision by Managers First, it is important to note that fixed costs do not change as a whole but register changes per unit when production volume changes, and on the other hand, variable cost indicates constant unit cost but changes in total when a decrease or an increase in production is registered. Ford’s fixed costs may include rents for the plants and machinery while variable costs may include direct labor. This means that fixed cost is as important as variable cost and monitoring the changing trends stands to help managers make informed decisions. World over, absorption costing is commonly used for both internal and external information in an organization. Most companies use absorption approach entirely because of its attention on full costing of units of a particular product. In order to make informed choices, most managers assume that fixed manufacturing overheads directly vary in relation to the automobile units sold, something that never works (Weygandt, Kimmel and Kieso, 2011, p. 103). Managers who make this mistake may assume that since costing is done per unit base, an additional manufactured should cost the same, while reality shows an additional expense. Ford Motor Company is a multinational manufacturer, employing very many employees in all the plants across the globe. Labor has been an important factor in ensuring that production consistency is achieved in this company. In the current economic uncertainties, managers in this company are sometimes faced with the dilemma of laying of workforce in an attempt to maintain profitability. Such a decision is informed by the notion that direct labor is variable cost, something that is disputable because most of its workers are highly skilled and are under employment contracts. For this reason, any decision made by the ... Read More
Cite this document
  • APA
  • MLA
(“Cost Accounting and Management Decisions Assignment”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/109607-cost-accounting-and-management-decisions
(Cost Accounting and Management Decisions Assignment)
“Cost Accounting and Management Decisions Assignment”, n.d. https://studentshare.net/finance-accounting/109607-cost-accounting-and-management-decisions.
  • Cited: 0 times
Comments (0)
Click to create a comment
Management Accounting - Materials Accounting / Absorption & Marginal Costing
Financial accounting mainly focus on summaries past financial dealings which are reported periodically in contrast, management accounting evaluate past, present and future information which are reported continually to be used in making appropriate decisions.
5 Pages(1250 words)Assignment
Management accounting
The management process is dynamic consisting of various activities, elements and functions (Hermanson 2010). The key major management functions involve planning, controlling, decision making and communicating. It is notable that management accounting information is very vital in executing these management functions in an organization.
4 Pages(1000 words)Assignment
Management Accounting
The main reason for doing this is that, these investments involve commitment of large sums of funds; they take a long time, require much commitment from the management and are irreversible. The four major techniques used for evaluating investment in capital projects include: accounting rate of return (ARR), Payback period technique, net present value (NPV) technique, and internal rate of return (IRR) (Gotze, et al., 2007).
11 Pages(2750 words)Assignment
Managerial and Cost Accounting
Managerial accounting is the identification, collection, classification, and reporting of financial and non-financial information, which is useful to internal users in planning, controlling and decision making (Rich and Jones 667). Managerial accounting is a vital function of an organization. It aids in planning for the future.
10 Pages(2500 words)Assignment
Managerial and Cost Accounting
According to the author of the article, the evolution of the field of Management Accounting as a separate branch of accounting dates back to the late 1930s. It was during this decade Ross G. Walker joined the faculty of the Harvard Business School. He came from a successful management position in a business corporation.
14 Pages(3500 words)Assignment
Cost and Management Assignment
According Horngren, Bamber & Stratton, Lis proposal to beef up the financial statements violate at least three ethical standards of accounting: competence, integrity, and objectivity. According to them, an
8 Pages(2000 words)Assignment
Management Accounting
The decisive issue in management accounting is whether the government, organization or consumer is more contented with the transaction or dealing made. Civic actions will tend to generate either more benefits or demerits that determine
6 Pages(1500 words)Assignment
Cost accounting: budgeting
In this respect, a successful budgeting should have a concrete long term goal, knowledge of expected returns, contains accurate data, have simple tools of budgeting, and must be realistic in nature. The company that
1 Pages(250 words)Assignment
Cost, Budgets and Strategic Decision Making in Management Accounting
Management accounting includes communicating information to the affected employees. Budgets are important management priorities. The operating budget is done in several consecutive steps (Debarshi, 2011). First, the revenue or sales budget is prepared. The marketing
5 Pages(1250 words)Assignment
Management Accounting
The primary purpose of the costing systems in companies is to ensure that the cost of production, operation and other activities are determined and controlled. The management accountants
7 Pages(1750 words)Assignment
Let us find you another Assignment on topic Cost Accounting and Management Decisions for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us