Got a tricky question? Receive an answer from students like you! Try us!

Process Costing - Essay Example

Only on StudentShare
Undergraduate
Essay
Finance & Accounting
Pages 4 (1004 words)

Summary

Process Costing Name: Grade Course: Date: Outline Introduction……………………………………………………………………….….3 Importance of the Study………………………………………………………….……

Extract of sample
Process Costing

Companies need to know the amount of money spent on their products before they can set appropriate selling prices. Firms that fail to accurately determine process costs can find themselves setting too low prices that lead to losses or too high prices that scare away customers. Accurate process costing helps to set right prices or adjust the process if costs cannot allow reasonable pricing. Importance of the Study Although many researchers have contributed to this topic, little can be seen in terms of standardization of the approaches of determining process costs. This paper is a literature review aimed at determining major points of divergence that have prevented standardization of process costing methods. Four scholarly articles are analysed to determine gaps, discrepancies and common grounds in relation to process costing. The paper will make suggestions on the best way forward as well as lay ground for future research. Literature Review One of the articles reviewed is a research study done by Cooper and Slagmulder aimed at determining process costing methods used by different Japanese firms (2002). ...
Download paper
Not exactly what you need?

Related Essays

Full Costing and Variable Costing
Cost Accounting: A 12 Managerial Emphasis. 12th ed. Prentice Hall. 12 Elliott Taylor, 2011. Full-Costing Income Statement vs. Variable-Costing Income Statement. [online] Available at < http:/smallbusiness.chron.com/fullcosting-income-statement-vs-variablecosting-income-statement-20350.html > [Accessed 25 December 2011] 13 Jae Shim, Joe Seigel, 2011. Schaum's Outline of Managerial Accounting. 2nd ed. McGraw-Hill. 13 John Simms, 2008. The Variable Costing Income Statement for External Reporting. VDM Verlag. 13 Noah P. Barsky, Anthony H. Catanach, 2004. Management Accounting: A Business Planning…
8 pages (2008 words)
Contrast and Compare Absorption Costing with Marginal Costing
The Strict adherence to a particular costing method is critically important to effectively managing the finance in a firm since its management will be bale to make proper appraisal of the productivity as well as performance of various costs units in the firm. This piece of research reviews full costing and variable costing and outlines the conceptual framework and key assumptions of these cost methods. This paper compares and contrasts these approaches to product and services costing with a view to explain whether the choice of full costing or variable costing still matter or not. Full…
8 pages (2008 words)
Product Costing.
This implies that, the cost of a finished unit in inventory will include direct materials and labor, and both fixed and variable manufacturing overheads. It is notable that, absorption costing is the most preferred method for external reporting as per the Generally Accepted Accounting Principles (GAAP). Absorption costing is fundamental in tracing the variable costs of production and the fixed costs attributed to the production of the product (Riahi, 2001). It is imperative to note that, absorption costing is dissimilar from the other costing methods since it takes into account fixed…
7 pages (1757 words)
Target Costing
One of the ways is that there is proactive focus on cost. The strategy once applied effectively, some of the unnecessary costs are thereby eliminated. The strategy determines in advance the costs to be incurred in a production process. Once they are determined, some of the costs that may have been incurred in a firm hence interpreted as loss are dropped. The firm will not incur the costs and will save the funds for other profitable ventures. Many firms obviously view the concept of cost as a very complex one as it is what reduces the profit. However, they strategize by first formulating the…
2 pages (502 words)
Variable Costing
Product cost versus period cost Also known as inventorial costs, product costs are all those costs that are used in the acquisition and production of a product. They include direct labor costs, cost of direct materials and the manufacturing expenditure (Maher et, al 2006). They are normally assigned to an inventory account in the balance sheets and released from the stock as expenditure. Period costs are all the omissions in the product cost normally expensed on the income statement or report in the time of occurrence for example the office rent, administrative expenses and commissions on…
5 pages (1255 words)
Job Order versus Process Costing Techniques
Costing is one of the counting techniques used by companies’ manufactures goods and services to ascertain the labor, material expenses, and overheads incurred in operations. This is very crucial costing enables a company to know with certainty the materials needed, labor requirements and the overheads incurred for planning purposes. Costs are first accumulated after which they are assigned to products and services. Job-order and process costing are the two main product costing techniques usually employed for accumulating and assigning costs to services and products. Process costing,…
4 pages (1004 words)
Process Costing
In the contemporary period, process costing is one successfully adopted accounting methodology in organizations. Organizations use process costing for effective cost calculation, especially at times when other costing models (job costing or activity based costing) are futile and not producing desired outcomes. Process costing is applied when activities like cost accumulation, cost assignment and cost assessment are to be performed and conducted. When both cost of fixed and variable natures are to be calculated then process costing comes into organizational application. …
7 pages (1757 words)