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Cost Accounting and Management Decisions - Essay Example
Finance & Accounting
Pages 5 (1255 words)
Cost Accounting and Management Decisions Introduction The purpose of this essay is to evaluate the cost accounting system of an US based manufacturing organisation, i.e. Alcoa. The paper further assesses the cost structure of the company through the application of a cost-volume analysis…
Company Description Alcoa is an American manufacturing organisation which deals in producing primary aluminium and fabricated aluminium. Furthermore, the organisation is also known as one of the biggest drillers of bauxite and refiner of alumina in an international context. The primary products of Alcoa are divided into two major categories which are aluminium products and non-aluminium products. Aluminium products of Alcoa comprise alumina, primary metals, flat-rolled products and engineered products and solutions. On the other hand, non-aluminium products of Alcoa include industrial fastenings, precision casting and aerospace products (Alcoa Inc, 2013). Impact of Changes in the Variable Cost / Fixed Cost Structure of Alcoa on Cost- Volume Profit Analysis Decisions by Managers Cost-Volume-Profit (CVP) analysis is often argued to assist in taking decisions about business operations for any manufacturing organisation. It is applied as a method of inspecting the link between fixed and variable expenses with respect to number of manufacturing units and related profits. In order to use the CVP analysis, there is need for analysing the business operations obtaining an unambiguous understanding of fixed expenses incurred by the business in comparison to variable expenses. ...
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