GFI Executive Report Free Essays

Gracie Fay International (GIF) has an art to understand their abilities to record, classify, and summarize their financial, but they are lacking the understanding of their cost accounting systems, product costs for production of took balls, specific job order cost for special order products, and their cost information on the two models of pitching machines, which all of these areas are not being Justify on how Important cost accounting is too growing company Like GIF. These four areas will be explored In more detail in order to shed light on each activity, which will ensure that GIF Is asking a profit, correct decisions, and recognizes any corrections that need to me made. GIF must understand that cost accounting Is an Important function In their corporate strategy. We will write a custom essay sample on GFI Executive Report or any similar topic only for you Order Now Cost accounting Is known as managerial, or management accounting, which It provides economic, and financial Information In making decision for the company. Its mall objective is to provide information In ladling management to plan, direct, and control operations. It also improves these controls by supplying data on the cost incurred to each manufacturing department. The skill sets that I have will enhance GIF on many levels, and they include; full knowledge of purchasing policies, processes, and procedures, balance and reconcile records, able to research and resolve unbalance issues, have strong technical skills, solid decision making skills, and the ability to exercise independent Judgment, prioritize and plan, work activities efficiently to meet deadlines, work as a team or independently, detailed oriented, excellent oral and written communication skills, and strong mathematical skills. Cost management is used to plan, and control the company’s decision process, in which reduce cost would be lower, and product value would increase for customers. It provides information that ensures management makes short, and long term decisions no matter what kinds of materials are being used, changes in plant process, or in product design. Management would make these kind of decision to increase short term profits, and Improve the long term position of the company. There are three cost system that are used for manufacturing operations; Job order cost system, Process cost systems, and Activity based (BBC). Job order Is used to reduce products for specific orders, and It estimates the costs with producing the goods for different Jobs (Atkinson et. Al. 2005 p. 79) Process costing Is often used by companies that operate using continuous processing. This type of system applies the costs of production, labor and support actively as the goods pass through the different process stages. (Atkinson et al, 2005, p. 92-94) BBC has a two stages, the first stage Is cost Is allocated to pools, and the second stage Is the cost pools are allocated to products, or services. (Edmonds et al, 2006, p. 33). These septets include understanding the difference between manufacturing, and non manufacturing costs, computing the cost of manufacturing a product, indemnifying cost behavior when it comes to utilizing cost volume profit relationships, setting prices, budgeting, controls, and capital when it comes to the company’s strategies. Transform raw materials into finished product, and the cost consist of basic materials, and components, labor, and factory overhead in order to complete a finished product. The material, and labor is classified as direct, or indirect to the finished product. To explain direct material, it is taking major components, which can be traced to the finished product. It counts these components carefully, because of the significance to the product, for example take a lawn mower its major components are the engine, wheels, and handle, but the indirect materials is those minor items like screws, nuts, bolts, washers, and lubricants, which is accounted for as factory overhead. Cost accounting also includes direct labor costs, which is all labor costs for specific work performed on products that can be conveniently and economically raced too product unit. Factory overhead is all factory costs that are indirectly related with the finished inventory. When it comes to cost behavior, the costs do not change in total, even when the product numbers increase, or decrease, and is considers to be fixed cost, an example would be rent. Other cost that a factory may incur would be known as non manufacturing cost, which includes selling, administrative, and financing costs that are deducted as expenses from the sales revenues. The manufacturing production process includes, Job shops, batch flows, etc. Which help determine the type of product cost system the company may utilize. It is understood that when making a decision its best to use estimation of costs, but management must have a good idea on how costs behave. There are several methods that management could use; the high low method, or the least square regression. When a company is setting prices there is one approach to think about, that would be the cost plus pricing. Then the company can apply the proper markup given the competitive market conditions, and other factors, like target selling price. In equines a budget aids in planning, and controlling of the company. Master budgets consist of operating, and financial budgets. The operating budget forecast sales, while financial budget is based on data from income statement. Let not forget that budgetary control is needed, this process compares actual operating results, and to identify problem areas in order to correct the issues. In conclusion cost accounting provides products, or services that greatly benefit Gaffs management team in many areas such as, competition, downsizing, or expanding globally, therefore GIF must understand that without cost accounting in their business plan the company may not be able to expand their activities, remain profitable or improve its competitive standing. Art 2 Product Cost Variable Fixed Direct Electricity x Real Estate Taxes x Indirect Leather to tie wood together Manufacturing Labor Water x Lubricants for Machinery Equipment depreciation Electricity, and Water- is manufacturing, variable cost, because the business depends on electricity, and when sales have increased it creates more demand for more product. Real Esta te Taxes, and Equipment depreciation- is fixed, because it remains instant within a relevant range of volume, or activity. How to cite GFI Executive Report, Papers