Acc 550 - Cost Accounting - Final Project

According to the cost-volume-profit analysis based on the performance of the firm, it makes some significant income before the taxes are imposed. The results obtained from the CVP analysis will help the management of the firm to make the best-informed decisions on the most appropriate ways through which the company needs to be run so as to realize its key objectives in the economy. CVP is much detailed, and the info can be easily broken down so as to make the management make the best decisions. The key disadvantage of the analysis is that it provides information that at times may not be so accurate and, therefore, lead to the making of wrong decisions by the management. It is essential that the managers conduct research among the employees before embarking on the best move that they can make to help them meet the key objectives of the firm. The analysis provides that the break-even point of the company is 45,465 units while the break-even revenue of the company is $568,312.50. It is also vital to acknowledge that the company is breaking even since it can produce these output with the use of the costs of production that are readily available at the company’s disposal.

The optimal cost allocation of the firm stands at the value of $655,525 based on the relevant costs. The key decision makers in the company need to use this info to explain the allocation of certain amounts of money in the company to help meet the costs of production. It comprehensively analyzes why certain amounts are meant to be used in other projects in the firm. The just-in-time (JIT) inventory system enables the company to improve the ways through which it serves its customer in the market. The clients will be served in a more appropriate and quick manner as opposed to when the system was not in place. Its key disadvantage is that it reveals too much info to the clients. It could provide room for the hackers to get into the system of the company and cause problems. The company needs to consider process benchmarking so as to improve the quality of the products produced by the firm. It will increase the volume of sales realized by the firm and lead to the increase in the net returns realized by the firm. Process benchmarking is equally important as the firm mainly deals in the production of one product in the market, umbrellas.

The firm also needs to adopt an alternative costing method called the process costing. It agitates for the accumulation of the materials, labor, and overhead costs used in the departments before allocating them to one single unit in the firm. The method is sustainable in the long run and will be essential for the realization of the key objectives of the firm in the market. The method is very easy to apply, and the company will not consume time once they start to make use of this alternative costing method in the market. The process is equally flexible and will be efficient in making the firm operate as it is expected so as to meet its potential. Lastly, the technique provides a more accurate info as it gives a cost per unit of its operations in the market. It is a move that will increase not only the volume of sales of the company but also its clients in the economy.