response wk#3

322 Week #3 response: Need a peer response to each post (Discussion). There are 2 post total Specific Rules for Discussions

Peer responses - Must be a minimum of 100 - 200 words and a maximum of 300 words for peer responses.

Must provide a minimum of at least one (1) reference in your discussion and peer responses.

There are two (2) required peer responses due per week.

Respond to TWO of your fellow classmates’ answers in an area different from what you responded to initially. In responding, either constructively expand on their statement or add another advantage, disadvantage or example. Make sure you are properly citing your sources if you are using information from another source (i.e. textbook, internet).

· Roberta Hopkins posted Jan 26, 2016 9:28 PM

f)  Identify ONE method of allocating costs and an advantage and disadvantage of that approach

Multiple Apportionment

The process of allocating costs allows organizations/businesses to categorize the various operating costs/expenditures, and then apply those fees to the appropriate business accounts within an organizations’ system.  In the multiple apportionment method, it involves a two-step allocation, but takes into account multiple, simultaneous apportionments during the initial steps (Nowicki 2008).

In overseeing costs for any business, it’s helpful and more efficient for budgeting purposes to allocate costs to the various departments, services or products that the fees are associated with in your accounting system.  In the multiple apportionment cost system, it means that you are allocating costs/expenses to more than two segments of your business (for example: payroll, equipment, leasing, and etc.,).  Although, this process sounds pretty simple, it presents some advantages and disadvantages.  One of the biggest advantage is you are able to determine all expenditures based on the established departmental categories.  So if you only allocated to spend one-thousand dollars for marketing brochures, but ended up spending an additional five-hundred; you would immediately recognize that you overspent the allocated amount for that department costs.  One of the disadvantages would be that it would require that all operating costs/expenditures be entered into the computer system correctly.  This process is essential in order to maintain an accurate operating account.  If various products or services are misallocated in any one area of the accounting system, it would offset that department expenses.  Also, having updated computer equipment, as well as, an organized business accounting system to keep everything on track with proper training to ensure that every data entry would be the same.

Reference: 

Nowicki, M. (2008). The financial management of hospitals and healthcare organizations.  (Vol. Chap 6, Cost Accounting).  Chicago, IL: Health Administration Press.

· Carol Bartus-drayton posted Jan 28, 2016 1:36 PM

The management accounting method is an excellent marketing tool that shows where to focus your goals when selling a product. An example would be a pharmaceutical drug that a company is looking to sell. The manager would examine the cost effectiveness of this product and with its data based structure, companies can present this idea with information that will back their decision making. Management accounting are steps of recording and informing information about the movement of a product within the company. It is used by managers to analyze and have control of the product and how much to distribute. It also is a great tool for the manager to be able to see the long-term growth of the company and to be able to accurately report these findings to upper management.

Nowicki, M. (2008). The Financial Management of Hospitals and Healthcare Organizations, Fourth Edition. Health Administration press. http://library.books24x7.com.ezproxy.umuc.edu/assetviewer.aspx?bookid=26367&chunkid=217964506

http://smallbusiness.chron.com/management-accounting-important-decisionmaking-53947.html