Managerial accounting Essay Example | Topics and Well Written Essays - 1000 words - 1

Managerial accounting - Essay Example This concept states that stock is valued at lower of NRV or cost. Since NRV is not given in this case, we will include the purchase price or the cost of stock which is 750 in this case. The cost of skilled employees: The cost of skilled employees is the direct cost of the order. As a result, there wages can easily be allocated to this order because we know that they have worked on this particular order during the week we can easily apportion this to the order and since it is the job of accountants to allocate all the recognizable costs to the appropriate cost centers, this order is the cost center and the cost activity of the workers is rightly apportioned to this order. The extra cash lost: Accountants are only concerned with the explicit costs and they are least concerned with the implicit cost. Implicit costs are the opportunity cost like this one. These are not the real costs but are based on economic assumption of the next best alternative. Similarly, since these costs are based on assumptions, we cannot tell the accurate amount of these costs. However, economists do use these costs when calculating normal profit of a project or of an item. But, since cost statement is done by accountants and not the economists, we will ignore these costs in the job order cost statement. We are only going to include those costs that have factual evidence as the concept of "materiality" states. As a result, when preparing the job order cost statement, I have not included the implicit amount as it is of little value to the accountants. Machinery depreciation: Machinery depreciation is a fixed cost. It means that irrespective of the operations performed by the machinery, a depreciation charge will be levied. Such costs do not vary with the output or the operations performed and hence we call them the fixed costs. In this case, since we have made a separate adjustment of the fixed overheads, it will lead to double addition if we add this cost separately. In other words, the depreciation charge is already included in the fixed overheads and it will lead to distortion of the cost statement if we include a separate head for machinery depreciation. In more professional terms, these will windows dress the financial statement and hence will give a different picture to the cost statement than it is in reality. For the reasons given above, I have excluded the amount for machinery depreciation from the cost statement. Electricity: The statement in the question tells us whether the order is received or not, the machinery will be in continuous use. Since all machinery is run on electricity, we can assume that the charge of electricity is also fixed. The entire costs related to machine are fixed as it is indifferent to the order and hence these costs will also be included in the fixed overheads. Hence by adding them separately, we will again be making a mistake of double debiting our cost statement. This again will distort the cost of the order in reality and will make us assume that we are incurring more costs than we really are. This is called as window dressing and should be avoided from both the ethical and legal point of view. Hence, this amount is excluded from the job order cost statement. Fixed overheads: Certain indirect costs are incurred when a company is working on a

Organization Development; contingency approach, content + process Essay

Organization Development; contingency approach, content + process theory;participative management;building effective groups, organizational structure - Essay Example Different scenarios and short term plans thus provide for a lot of cushion as far as vital tactical planning on the part of the said company is concerned and this indeed forms up as an important ingredient of the different processes that are running within the company. It might also be possible that the different departments present within a company have their own respective agendas that they have to meet and thus the long term planning can take a back seat in this equation. The administrative, decisional, interpersonal and other skills present within the repertoire of the management of the company have to understand that the long term planning has to make way for the tactical moves that are introduced within the company every now and then and which is for the betterment of all concerned, more than anything else, for the company and its stability in the long run itself. The skills just discussed have to come into play so that all of these unite and thus form up as a single, coherent message, a message that will take over the reigns of the company and talk about the problems that it is facing in the light of the completion and the eventual attainment of the strategic goals. The short term activities and tasks thus gain more and more attention from all concerned, not only the employees working within the company but also the stakeholders who have one thing or the other within the proper and sound functioning of the business, the consumers who want to know what exactly is happening with the company’s different products and services and why there is a lag at the retail side of those very products and services. Large corporations and entities need to have managers who have sound vision and proper tact within their grasps so that they can well understand the mannerisms of the ball game of satisfying the different publics, the customers and last but not the least the stakeholders. The requirement is to balance all of these so that the company