Cost Accounting Project - Assignment Example

Finance and accounting [Insert al Affiliation] Pearson candy company Inc. Pearson Candy is an American company founded by Barney Pearson. The company manufactures candy products such as candy canes, hand-wrapped candies, and lollipops. The company has got more than 60000 employees worldwide. The company has experienced a substantial increase in the aggregate profit due to financial adequacy that the company has experienced. The statements of financial position show the path to economy growth is smooth.

Basing on the available data in the income statements, the company has declined in performance. The financial statement that stands out clearly for the decrease in the performance is the aggregate revenue. At the end of year 2013, the net income of the company was $494,500 million. This is an increase of about 17%and 21% from 2012 and 2011respectively. The company brands the products and distribute to the market segments. Each market segment receives a unique brand as per their respective preference.

Importance of process costingEnables them to company manufactures thousand units of the product at some point in time. The method provides the manager with an answer of comparison of similar products from one period to another hence having a control over the manufacturing cost. The method allows the allocation of materials that part way the process. This enables in determining the value that processes material such as the labor cost.The company incurred several operating and management costs. The cost incurred includes factory insurance cost, plant depreciation $13,450, factory manager’s salary$90,000, laborers wages 450,000, supervisor’s salaries 250,000, power consumption $45,000 and warehouse maintenance cost 50,260.

The direct cost was which composed of laborer’s wages $450,000, indirect costs was $398450 that is factory insurance $120,000, power consumption $45,000, factory manager salary $90,000, depreciation $13,450 and supervisor $250,000. The fixed cost includes the warehouse maintenance cost of $38, 000.Balanced scorecard analysis From the financial perspective, the company has improved due to marketing of its products and services worldwide. From the annual report, the company garnered 26 billion as the total profit after tax.

This is the growth of 1.45% and 3% from 2013 and 2012 years respectively. From the customer perspective, there is an increase in the customer loyalty. This is due to the manufacture of superior quality products that give them a competitive advantage. The products sell faster than the competitors because of efficiency supply of products to the markets for their loyal customers. From internal business operation’s view, there is a strong internal control system that detects and prevents frauds and errors.

The company uses effective methods of allocating costs hence making it easier for computation of manufacturing costs. This has scaled up the operations of the enterprise. It can be learned that the company operates on ongoing concern, and there is no intention to liquidate the company. The company has a healthy finance, high liquidity, and high equity level. This enables the company to increase the price of the company hence increase in market value. Increase in the market value is a signal to investors who wish to earn income from the returns.

Conclusion In conclusion, the company’s stock will make sound investment due to increasing in the shares prices in the stock market. This increase in the share price is due to growth and increase in revenue. This, therefore, means that any investor who attempts to invest in such a company is in opposition to earn dividends and income.ReferencesPearsons Candy Company, P. (2015, March 11). PrivCo | Shopping Cart. Retrieved from https://www.privco.com/cart