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D1: bhuvana
Accounting plays a vital role in an organization, which leads to gain favorable profits. Change in activity of production also affects the differences in cost behavior. This behavior is implied as a change in the whole business. Cost may stay the same or replacement depending on the market. In managerial accounting and cost accounting, t three types of cost behavior are most common (("Cost Behavior Patterns", 2020).
Variable costing, fix costing, and mix requiring are types. In variable cost, the cost is directly proportional to the activity, and as the activity increases, the value also increases. And the opposite is too exact (Graybeal, Franklin & Cooper, 2020).
Fixed costs, as the name indicates, are the costs that do not change when the activity is increased or decreased. The price is not affected by the production or any event. Mixed costs are a combination of fixed and variable expenses partially (Lakmal, 2014).
The management team must understand how cost behavior is crucial for planning and controlling the cost of organization activity with an analysis of the damage to volume profit. To design a budget for a business, studying the effects of cost change in the activity level showcases how much profit can be generated (Popesko & Novák, 2014).
Process costing
In process costing, the cost is assigned to the process of manufacturing each unit of production. In this, the price of each unit is assumed to be the same. This type of costing is commonly used where the production of goods takes place at a mass level. The costs are not distinguished easily when it is linked to individual units ("Types of Costs by Behavior", 2020).
Weighted average cost, first in first out, and standard charge are the different types of costing process. In process costing, costs are built over a fixed duration and then are assigned to units of production at a specific time frame ("What Are Cost Behavior Patterns?", 2020).
A company that is owned by Mark and Perk produces the machines in a batch. The setup cost per batch is $2300. $3 is the variable cost A let units for 1-13000. Another variable cost per unit that is more than 13000 is $7. The fixed cost initially js $12000. For every 10,000 units, the cost of the additional fire is $3000. Determine the total cost for the company with the 13,600 units produced in 10 batches.
Total cost= $2300*10+$3*13,600+$12000
=$75800
References
Cost Behavior Patterns. (2020). Retrieved 7 June 2020, from https://saylordotorg.github.io/text_managerial-accounting/s09-01-cost-behavior-patterns.html
Graybeal, P., Franklin, M., & Cooper, D. (2020). Identify and Apply Basic Cost Behavior Patterns. Retrieved 7 June 2020, from https://opentextbc.ca/principlesofaccountingv2openstax/chapter/identify-and-apply-basic-cost-behavior-patterns/
Lakmal, D. (2014). Cost Analysis for Decision Making and Control: Marginal Costing versus Absorption Costing. SSRN Electronic Journal. doi: 10.2139/ssrn.2417024
Popesko, B., & Novák, P. (2014). Implementation of the Process-Oriented Costing System in a Hospital Department. International Journal Of Trade, Economics And Finance, 82-87. doi: 10.7763/ijtef.2014.v5.345
Types of Costs by Behavior. (2020). Retrieved 7 June 2020, from https://xplaind.com/552306/cost-behavior
What Are Cost Behavior Patterns?. (2020). Retrieved 6 June 2020, from https://bizfluent.com/info-8702920-cost-behavior-patterns.html
Reply:
D2: mahita
Process costing is a cost accounting technique in that costs incurred during creation are charged to methods and averaged over the entire units manufactured. So it can quickly determine the value of each product in every stage. It is the procedure of production, which is a method of accounting that the industries and factories acquire, where the characterized (Arzova & Uydaci, 2005).
Identical product is manufactured and mainly enacts through the various processes for being altered into the last product. It can also demonstrate the unit cost and total cost of a technique for all the methods that are accomplished in the industry (Castelo Branco & Lima Rodrigues, 2009).
So the main features of process costing are the output of a plan is the better input of another, last product is homogeneous, both indirect and direct costs are indicated to the various processes, the production from the final process is transferred to completed stock and the output of the single operation is substituted to another one at a better price than encompasses every profit of previous methods and that is not at the better cost (Drake, 1972).
Then cost behavior is a type of indicator of how a cost will alter in cumulative when there is a change in a specific activity (Graybeal, Franklin & Cooper, 2020).
So in managerial accounting and cost accounting, there are mainly three cost behavior categories: fixed costs, variable costs, and mixed costs. Analyzing how prices behave is crucial for management controlling and planning organization costs and for analyzing the cost-profit-volume, which is also called a break-even point of the company ("How Is Process Costing Used to Track Production Costs?", 2020).
In that, the entire variable cost is lower than proportionally, and the amount of activity is further reduced. So based on the whole amount of a fixed price will not alter when there is an increase or decreases in business (Huff, 2005).
A company is manufacturing shoes in which the company has emerged from three departments. The first department deals with acquiring resources including raw material (leather) and machinery. Then the next department deals with the design and analysis of shoe manufacturing in which the company incorporated Graphic User Interface systems and new software and design tools. The last is the production department which consists of experts to analyze the quality of shoes and packaging labor.
First department
Cost of raw materials = $50,000
Cost of equipment = $25,000
Second department
Investments in design tools = $45,000
Costs of GUI systems= $30,000
Third department
Salaries of experts = $100,000
Wages to packaging labor = $50,000
The company has manufactured a total of 10,000 units per year.
Total investments or costs of manufacturing = 50,000 + 25,000 + 45,000 + 30,000 + 100,000 + 50,000
= $300,000
Cost per unit = total costs/total no.of units manufactured.
= 300,000/10,000
= $30
References
Arzova, B., & Uydaci, M. (2005). The Role of Non-Food Suppliers in Turkish Retailing Industry in the Target Costing Process: Can Target Costing be an Alternative in a Competitive Pricing?. SSRN Electronic Journal. doi: 10.2139/ssrn.796084
Castelo Branco, M., & Lima Rodrigues, L. (2009). Exploring the importance of social responsibility disclosure for human resources. Journal Of Human Resource Costing & Accounting, 13(3), 186-205. doi: 10.1108/14013380910995494
Drake, K. (1972). The Importance of Costing Adult Education. Studies In Adult Education, 4(2), 120-130. doi: 10.1080/02660830.1972.11771889
Graybeal, P., Franklin, M., & Cooper, D. (2020). Distinguish between Job Order Costing and Process Costing. Retrieved 7 June 2020, from https://opentextbc.ca/principlesofaccountingv2openstax/chapter/distinguish-between-job-order-costing-and-process-costing/
How Is Process Costing Used to Track Production Costs?. (2020). Retrieved 6 June 2020, from https://saylordotorg.github.io/text_managerial-accounting/s08-how-is-process-costing-used-to.html#:~:text=Process%20costing%20systems%20require%20the,for%20each%20stage%20of%20production.
Huff, P. (2005). Include Examples that Support Quality Improvement when Teaching Process Costing. SSRN Electronic Journal. doi: 10.2139/ssrn.649847
Reply:
D:3 deepthi
Cost Volume Profit analysis utilized for the affirmation about the adjustments in the costs and additionally about how the volume will impact the working pay and the general option. These used for the introduction assessment of the affiliation. There are different sorts of presumptions that are accepted to be made unsurprising. The critical elements made reliable, which meld the business cost per unit, variable costs, total prices, fixed costs are consistent, everything which made sold, and the fees are affected by the movement changes.
As Manager, I will follow many strides to process costing, considering the accompanying advances, it's certainly not difficult to calculate the managing cost. Separate the Stock – The necessary time of procedure requiring is to breakdown the stocks by examining the stock stream. Convert Stock Expenses – The accompanying stage is process costing the in-process things, for instance, if an industry is passing on 500 PC. Out the entirety of the 500 considered an in-process item; at that point, it proposes 50 % finished and is regarded as 250 wholly organized. Learn high costs - After changing over the stocks figure, both aberrant and direct value (Wong, 2017).
* $150 + $ 100 = $ 250
* 500-$250= $ 250.
The execution of the costing on the business things in progressively fundamental and business the board needs to make proper costing structure the administrators. If the company has been experiencing profits while making extraordinary, it will make me select the usage of a methodology costing structure to choose the actual cost and focus on social affairs supporting information from direct work, creating overhead, and direct materials viable.
The Manager has to develop a part of the practices to assess the costs while changing the segments that can interfere with the price. Cost should be practice to ensure there is assortment in fixed cost the board, for instance, rent premises. Final.ly, as a business manager costing o different things and other finished things, it is progressively critical since it urges the business to make practical arranging, which variable costs and fived costs effectively.
References:
Wong, S. (2017). Information partaking in contending gracefully chains with creation cost decrease. Assembling and Service Operations Management, 19(2), 246-262.
Reply:
D4 : Navya
Recession refers to a sudden decrease in some economic activities done regularly in some geographic locations. This kind of decline will create a significant loss of economy where goods prices will reduce. If this recession is high, then the government of that country will try to increase the production and supply of money, lowering interest rates on all products. A recession occurs when the economy of a country slows down for more than a particular period continuously. Inflation is considered as one of the reasons for the downturn where the price of good increases consistently due to which percentage of buying that product at the same cost will reduce, leading to stagnation. Recursion will depend on how long it lasts, and, in a period, unemployment is the factor that increases during this recession. During this period, the employees' income tends to decrease gradually, and government borrowing for money from other countries will increase. If this recession continues for a more extended period, then the educational sector is the most affected. Young people will not get jobs after their schooling, which will ruin their entire life. Along with the government, families will also be affected due to recession. Still, they can come out of this situation by proper planning of their expenditures and adapting to a new lifestyle (Kim & Warner, 2017).
There are various ways that help to overcome the recursion period, like enrolling in an emergency savings fund, analysis of budget, diversify income, and investments. An emergency fund is a kind of savings in which individuals save some amount of money to have a day to day basic things during financial crisis time. During the recession, one must analyze the amount of income he is paid and prepare a useful chart on how to spend that amount wisely by paying debts on time. It is recommended to have more obligations during this period (Lin, 2010).
References
Kim, Y., & Warner, M. (2017). Geographies of Local Government Stress after the Great Recession. Social Policy & Administration, 52(1), 365-386. doi: 10.1111/spol.12307
Lin, J. (2010). Six Steps for Strategic Government Intervention. Global Policy, 1(3), 330-331. doi: 10.1111/j.1758-5899.2010.00046.x
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D5: Ella
For this week, I decided to research on two articles with two completely different views on the effects of government intervention on The Great Recession. In the first article “Causes and Cures of the great recession”, we learn a very different and unique approach about the causes and effects of The Great Recession. According to Steven Horwitz, a Professor of Economics at St Lawrence University, The Great Recession was not a fiasco of free markets. Instead, he argues that it was an illustration of the unwanted consequences of government intervention. The article talks about how the government caused this by expansionary financial policies and ill-advised attempts to boost the housing market in The United States of America. Professor Horwitz suggests getting the government out of banking completely as a way to end the cycle that has been going on since The Great Recession (Horwitz, 2012, p.65).
Claudia Dobre however, Professor at the University of Constanta, completely disagrees with Steven Horwitz proposition! In the article “Global Economic Crisis and Government Intervention”, she pushes her opinion that government influence in the economy need to be increased, by a lot. Dobre argues that if the economy isn’t controlled by the state, the few people with wealth and power would always be favored. Furthermore, she argues that even though countries suffer financial pain in times of crisis, the most disturbing impact is always human suffering (Dobre, 2016, p. 14). Therefore, to avoid damaging effects caused by free operations of markets, state intervention is more than essential. Dobre mentions the importance of appropriate regulations, and if followed, can prevent extremes, abuses, and harms, caused by individuals (Dobre, 2016, p.15).
References
Dobre, C. I., & Răsăuţeanu, C. I. (2016). Global Economic Crisis and Government Intervention. Ovidius University Annals, Series Economic Sciences, 16(2), 14–19.
Horwitz, S. (2012). Causes and Cures of the Great Recession. Economic Affairs, 32(3), 65–69. https://doi.org/10.1111/j.1468-0270.2012.02176.x
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D6: Aparna
Fiscal relief during the recession
According to McNichol, Leachman, & Marshall (2020) has projected that Covid-19 has created a pandemic situation around the globe and it is predicted that it will be serious in the upcoming days. Due to this pandemic situation economic condition of major countries has become worse and it is going to be severe as it is going to lead to a situation that will lead to a situation which is never been faced by any local or federal government in the past. It is going to be the worst year of all time and the greatest recession ever faced according to the various researches that have been done in recent months. The federal government has so far provided the needed relief funds to the local government but it is not that good enough to support proper medical facilities for the long term. It is predicted that with the prolonged recession it will lead to an increase in the program cost and also it will lead to cutting down relief funds which will be a major factor for the survival for most of the people. It is very obvious that for a prolonged period it is difficult for any nation to provide aid for all as the economic structure will fall down.
Within few months the condition has become so worse that the state governments are in great need of relief aid for support of the medical facilities and it is the duty of both president and Congress to provide the required relief fund and aid such that states get their proper fiscal relief. At the time of recession, it is needed for the government for practicing fiscal policies in which the government should focus on spending more and reduce the overall tax in order to restore balance in the economy. It is heavily required for the proper intervention of the government during the recession period as the government has the capability to increase expenditure and reduce tax. The government needs to provide more funds to the local government such that proper medical aid and other facilities can be provided to all to balance the overall crisis period. Various economists have the view that unemployment will continue till the second half of the 2021 year that means most of the states will face a serious situation in the upcoming months and even the budgets are totally imbalanced and sales tax revenues are declining at a rapid rate. It is been projected that states are going face around 105 million dollars short in the upcoming fiscal years.
Government network and local economic development
As per Larnell (2020), has projected in its study about the policies of the government during the greatest recession. The research basically focuses on the various cities of the U.S. where businesses are making most out of their incentives during the great recession. The research is being done with the help of the government based theories which basically focuses on the mutual resource dependencies and has checked the resourcefulness of the larger network which has played a major role in influencing the change in the various cities. The data set that has been used for the research purpose consists of the 162 council managers that have taken participation in responding in the survey made in 2004 and 2009. The survey was generally made on the topic of economic development. The result showed that most of the business cities have utilized their incentives even if there is a change in the size of the network and it is seen that most of the governments have contracted during the recession period. The research clearly shows that during the recession the power of the government weakens due to the economic crisis. It is also been seen that during the major economic crisis various private actors just abandon the network in order to focus on self-preservation.
References
Blackmond Larnell, T. (2020). Governance networks and local economic development policy during the Great Recession in the US. Local Government Studies, 1-18.
McNichol, E., Leachman, M., & Marshall, J. (2020). States need significantly more Fiscal relief to slow the emerging deep recession. Center on Budget and Policy Priorities.
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