Three Branches Of Accounting, Cost And Variance

1703 words - 7 pages

Knowingly, there are two main branches of accounting namely, financial and cost; however the usage of these accounting methods has taken new routes in the recent era. In the past both were used to merely calculate profit and loss and calculating manufacturing cost. But the recent era has changed the dimensions dramatically and today both branches have interacted to form managerial accounting, which along with financial and costing information helps companies for management decision making. Traditionally the very two costing methods of management accounting counts on Marginal and absorption costing and the advancement has intrigued the scholars to develop a relatively new method of costing “Activity Based Costing”. The report coming forth elaborates over all three named methods as well as it presents an essay about the acceptability of the standard costing and variance analysis at current, its challenges, and the choice of approval for use in the future.
Variable (Marginal Costing)
Anyone with economic background is well aware of the term “marginal” which defines as extra, thus the economic definition of the term implies cost of producing any extra unit of a product; however the accounting meaning differs stating variable costing as the incurrence of cost on manufacturing other than fixed costs. Meaning thereby, that it accounts for the direct labor cost used in producing a product and the fixed cost of production is deducted at the later stage as indirect expenses/cost. The question comes of “Why” to use this particular method? Evidently speaking, if this method is preferred, there are certain underlying benefits. The prime noted and argued benefit is said to be its attempt to differentiate between fixed and variable costs, as fixed cost is more dispersed to all activities and the variable cost is more significant and specific to the production activities and are therefore considered mainly under this method. The firms applying marginal costing to their production system are mincingly aware of the cost trends and it is helpful to match with selling price trends. For instance in case of increasing inflation the firm can establish an understanding of relevant differences to adjust the prices against inflation. Internally, it alarms the company about the menace of excessive variable costs to help company to consider its early remedies. For any business, it needs to determine the minimum production level to cover its fixed cost (breakeven) and marginal costing in this regard is effective and provides the breakeven production. The literature provides that this method is perceived to be the most easy to apply and is extensively used by the manufacturing organizations. Although it serves significant advantages to the organization, on the contrary the method is primarily criticized for being ineffective in long run. Since, fixed costs in the long run is actually not fixed and tends to change with change in factors of production; therefore the scholars...

Find Another Essay On Three Branches of Accounting, Cost and Variance

three branches of the government is about just that, the 3 branches of the US government

565 words - 2 pages In one form or another order must be maintained. Different countries have different methods of doing this. Some countries have a dictatorship, while others have a monarchy. The United States, however, has a democracy. In a democracy three different types of branches of government present themselves.One branch of the government, the Executive Branch includes the White House and Office of the President, plus offices that work directly with the

The Three Branches of Government in the USA

719 words - 3 pages The United States government has three branches, judicial branch, legislative branch and as well as the executive branch. Each branch has its own weight in the system. The executive branch carries out the laws, the legislative makes the laws, and the judicial starts the laws out in the court room. This will be an informative piece on how each of these branches will affect the people as well as the terms they each came too. To give a fore sight

The Relationship Between the Three Branches of Government

1708 words - 7 pages Discuss, considering in particular Bogdanor’s argument that the separation of powers has been strengthened within the British Constitution in recent years. This essay aims to look at the Separation of Powers in the UK Constitution. The relationship between the three categories of public power-legislative, executive and the judicial. The overlaps that are present with the individuals operating in the various organs and their functions in the

Bureaucracy and The Branches of Government

671 words - 3 pages branches of government: the legislative, executive, and judicial branches. The division of government into three branches and separate powers gives each branch both exclusive powers and some additional powers over the other two branches. With the bureaucracy operating behind the scene and in these spaces, it is NOT possible for the group to operate on the same level as the other three branches. While bureaucracy has come to be conceived as a "fourth

Explain the differences between the three main branches of Judaism - JEHS/ Studies of Religion - Essay

966 words - 4 pages The Jewish religion has three main branches with each have differing characteristics, however they all share the same core ethical teachings outlined in the Torah. These branches are Orthodox, Progressive and Conservative Judaism. Followers of the Orthodox denomination must adhere to and follow strict guidelines, and individual discretion in relation to the mitzot is not tolerated. Whereas the Progressive and Conservative denominations

Cost descriptors Dys Singa University of Phoenix MBA 503: Introduction to Finance and Accounting

1428 words - 6 pages Cost Descriptors MemoTo: All Human Resource ManagersFrom: Jane Doe MBACC: Jim Jones CFODate: April 29, 2008RE: Cost DescriptorsAt the last meeting, it was apparent that our Human Resource Managers (HRM) lack the basic knowledge of the accounting cost descriptors terminology and concepts. The use of efficient cost accounting techniques in accordance with the generally accepted accounting principles (GAAP) regulations is mandatory for accurate

Term Paper Assignment Quality, expedience and cost are the three

1460 words - 6 pages Term Paper Assignment Quality, expedience and cost are the three determining factors in the success of any business in today's market. To ensure success in the software engineering and analyses market, you have to be able to turn out a high quality product faster then your competitors and do it at less of a cost. Companies tend to resist change because they are comfortable with the way things are done and they fear failure. In other words if it

Management Accounting: Cost analysis and determining the Break even point and Selling Price of an event package

2111 words - 8 pages Management Accounting Cost analysis and determining the Break even point and Selling Price of an event packageResearch, cost and price a package for an event. The package is for the executive team of a company based in London. A detailed cost analysis should be prepared. The B/E point and the selling price should be determined of the packageContentsSection 1: Introduction page 1Section2: The Package. page 2 2.1 Calculations and Tables page

The branches, nature and importance of philosophy as a scientific descipline

1571 words - 6 pages IntroductionI am going to describe the nature of philosophy and show its importance as a scientific discipline. I will list some of its branches and explain the part of philosophy they deal with. This in turn will describe the subject matter of philosophy as a whole.The word philosophy is derived from two Greek words: philo and sophia. The former means love, while the latter means wisdom. Therefore, the word philosophy simply means love of

Accounting for the Cost of Software Programs at AdCom Games Develop a Product Costing System

1757 words - 7 pages If done right, I believe that all of the costs can be allocated to each of the three products through both direct and overhead costs. The only direct costs that are being included currently are labor and manufacturing costs. I broke up overhead into overhead based off direct labor and overhead based on units sold. Overhead based on direct labor includes the cost of the Product Development Support Center, interest expenses, and general and

ACCOUNTING FOR DECISION MAKING: TYPE OF COST INVOLVED IN TAMIN'S FRIED CHICKEN COMPANY

3380 words - 14 pages stewardship accounting, management control, planning and decision making.There two main costs in Tamin's business; fixed costs and variable costs. The combination of fixed costs and variable costs will derive the production total cost. The total cost equation is TC = TFC + (UVC x χ). Fixed costs are those costs that do not vary at all with volume, or independent of the current level of activity and not expected to change in the short term

Similar Essays

Studying Accounting And Branches Of The Field

670 words - 3 pages according to the place where you work but you also learn law in accounting field. Management Accounting Management accounting is totally different from financial accounting in F.A you know how to maintain books and how to prepare accounts though the basics remain the same but in management accounting you mostly concentrate on cost of the product, which your company will be selling so in management accounting studies you normally concentrate on one

Three Branches Of American Government Essay

1898 words - 8 pages Three Branches of American Government The origins of the American government are traced all the way back to the struggle between British colonists and the British monarch. The thirteen colonies were growing rapidly, and had been creating their own political and legal systems. The British monarchy imposed a series of taxes on the colonists, and ignored the colonies argument of taxation required representation. After parliament created a

Three Branches Of The United States Government

1542 words - 6 pages The following paper will discuss the branches of the United States government. The paper will include reasons why our forefathers divided the government into the legislative, judicial, and presidential branches; how the branches interact with each other and how the braches are balanced in power. This paper will also discuss the success of the three branches and how conflict arose between supporters of a strong federal government versus

Three Branches Of The Texas Government

1790 words - 7 pages In my analysis of the Texas Constitution I will assess the three branches of our State Government, the Legislative Branch, Executive Branch and finally the Judicial Branch. Our State Government resembles our National Government in various ways but also in very different ways which we will review in this essay. I will identify a handful of criticisms and problems associated with the provisions in each of these branches of our State Government