DQ52 - Essay Example

Comments (0) Cite this document
“Managers want to know total costs, both producing-department costs and the costs of using resources from other departments” (Horngren,…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.6% of users find it useful
Read TextPreview

Extract of sample "DQ52"

Cost Allocation The goal of analyzing this type of allocation method is to ensure that profit (or at least the reporting of profitability) is maximized. “Managers want to know total costs, both producing-department costs and the costs of using resources from other departments” (Horngren, Sundem, Stratton, Burgstahler, and Shatzberg, 2008, p.701). If wage rates vary, then it would be difficult to apply this to a cost allocation base which is typically meant for fixed cost environments. For example, if the manager is looking to understand total costs, they are going to review the manufacturing environment, assuming this is a product oriented company. The business needs to understand its overhead and should be looking at this from a fixed cost perspective. If the wage rates are fluctuating in this or different departments, the element of fixed costs is removed and makes this practice unpredictable for maximizing the reporting of financial health.
Measuring overhead has to do with the health of the operating environment which relies on understanding costs that are generally not variable. These costs can include administration, groundskeeping, machining and assembly (Horngren et al, 2008). When looking at administration overhead, it is going to be practical to want to know if their wages are fixed. If wage rates continue to fluctuate, deciding where to allocate the total overhead costs is going to be highly difficult if the goal is to maximize financial reporting data to show better corporate health at the accounting level. For example, the monthly or weekly groundskeeping maintenance required could be looked at as a fixed cost, especially if contracted at x dollars per month/week. This overhead cost would be a necessity as part of operations and could be predicted for financial reporting based on the contract cost negotiated throughout the business operating year. Direct-labor cost would be an appropriate cost allocation option here if the wages, such as for administration, remained constant. This method would also give the senior business leaders more accurate overhead costs, if they were needed, for strategic review or for assessing the health of certain divisions.
Direct labor costs should be seen as costs which are directly incurred by the organization and should have an element of predictability surrounding them. It would be a guess that most real-life organizations do not have varying wages for certain things such as administration, unless they had structured some sort of bonus system where wages were subject to bi-annual pay increases. Even in this situation, it would be relatively easy to predict where future wages are going to be when assessing overhead. However, administration might be on an hourly pay basis, therefore making them subject to monthly or weekly declines in man-hours worked. This would make it difficult to use this type of cost allocation method when overhead costs continue to be unpredictable and changing. It would seem that the predictability and stability of wages would be connected with the method of cost allocation used.
Horngren, Sundem, Stratton, Burgstahler, and Shatzberg. 2008. Introduction to Management Accounting, 14th ed. Pearson Education. Read More
Cite this document
  • APA
  • MLA
(“DQ52 Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
DQ52 Essay Example | Topics and Well Written Essays - 500 words. Retrieved from
(DQ52 Essay Example | Topics and Well Written Essays - 500 Words)
DQ52 Essay Example | Topics and Well Written Essays - 500 Words.
“DQ52 Essay Example | Topics and Well Written Essays - 500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document


Case Study: Housing Recreational Areas and Bathing Facilities Disaster Sanitation

2 Pages(500 words)Essay

Social Psychology

...? s School Social Psychology Social Psychology deals with the study of social behaviors i.e. how the behaviors or the actions or even the feelings of people are affected by others. This implies that the social psychologists are interested in studying the interaction behaviors and patterns of how individual act and react in various situations and form social connections. The paper deals with exploring various aspects of social psychology including persuasion, social cognition, social influence, prejudice and discrimination, along with the development of positive and negative social behavior. After having understood these aspects of study, the scope as well as the application of the field of social psychology will further be clarified... s School Social...
3 Pages(750 words)Essay

Property management and administration

...Property management and administration The construction industry plays a vital role in the UK economy and delivers around 10 per cent of the nation'sgross domestic product. Research and development in construction industry is equally fragmented across a large number of areas. The construction industry has historically been conservative and risk averse, primarily due to the dictates of legislation, codes and standards and a culture of claims and litigation. Most constructions have to be designed within the restrictions of building codes, which reduces the scope for innovation. However, it is recognized that conventional thinking is inadequate in the face of today's pressing globalization and environmental challenges. There is a need... management and...
11 Pages(2750 words)Essay

The Hemingway Hero

...HEMINGWAY HEROES Introduction Ernest Hemingway has written several short stories that feature different characters. Some are even believed to be of resemblance to who he is as a person and as a writer. One of these is Harry, a writer who is about to die due to gangrene. He is an accomplished writer but he seems to forget the more important things in life, the very things that he failed to write. In this paper, we examine three characters who we can consider a hero and one character who is not a hero. Main Body The heroes from the stories of Hemingway have static set of characteristics. Many observe that these characteristics are essentially the same in all his works. In words, the Hemingway heroes are "courageous, confident... HEROES Introduction...
3 Pages(750 words)Essay

Tango Music

...Tango Music "While I was doing my research on the various styles of the Golden Age I would ask dancers that I met who, apart from themselves of , was the best dancer of the style. In the north of the city the answer always came back "Portalea". I would ask why, and I was always told that it was the way he interpreted the music that made him the best. One evening someone told me that Portalea was in the room, so, very excited, I scurried off to watch him dance. And I looked at him in amazement, because I simply could not work out how what he was doing had anything to do with the rhythm of the music at all. And that, of course, was my mistake. He wasn't dancing the rhythm of the music. He was dancing the phrase." (Christine Denniston... Music "While I...
7 Pages(1750 words)Essay

Management (in general)

...Management Table of Contents Table of Contents 2 Introduction 2 2 Functions of Management 4 2 Planning 4 2.2 Organizing 4 2.3 Staffing 5 2.4 Directing 5 2.5 Motivating 6 2.6 Controlling 6 3 Co-ordination & Management 8 4 Communication 9 5 Management Policies and Environment Factors 10 6 Conclusion 11 References 13 1 Introduction Management has been defined as the guidance, leadership and control of the effort of a group of people toward some common objective. This concept of management points out the purpose of function of management but it tells us little about the nature of management processes, that is, how the manager achieves the results. One way to analyze management is to think in terms of what manager does (Ahuja 2005... Table of...
10 Pages(2500 words)Essay

Engagement Strategy Presentation and Outline

...Engagement Strategy Presentation and Outline Engagement Strategy Presentation and Outline In all organizations, employee engagement and motivation is largely dependent on the policies and practices adopted by the HR department. Employee engagement is defined as the commitment and dedication of employees and is indicated by their performance and involvement in the organization (Employee engagement and retention 2012). Other than the HR policies and practices, employee engagement is also dependent on other factors included the management styles, the organizational culture, nature of the work as well as other factors related to the organization. Employees are highly affected by the changes that take place within an organization including all... Strategy...
5 Pages(1250 words)Research Paper

Examine the relationship between content and form in any of the texts, photographs, or portfolios in the section

... The relationship between content and form It is evident that such notions as form and content deal with the facets of things and their meanings. Semantics is considered to be the science that concentrates attention on substance of objects and diversity of relationships between these two ideas (Durant and Fabb, 141). We cannot but mentioned that variety of such relationships is unlimited and conditioned by different factors that lead to subjectivity and multiplicity of perception. First and foremost, we should notice that form and content are inseparable notions (Durant and Fabb, 141). It is logical and natural, that when person is involved in the process of perception, the thing he/she apprehends creates a catena of different meanings... The...
3 Pages(750 words)Essay

Marketing Strategies of Dominos Pizza and Pizza Hut

6 Pages(1500 words)Essay

Research Critique:

...Critical Analysis of a Research Article on Opioid Use at End of Life A Review of Literature Introduction A critical review of the appraisal of the Research Paper is needed to justify the research findings. The findings will be relied on and are necessary for further research. It will be of interest to all concerned- the medical experts and researchers, policymakers, medical journals among others. The need for analysis is required to validate whether there is a real significance in the Research, whether it can be relied on, or further research is necessary. The analysis will focus on the merits and limitations encountered. It will cover four areas:- Problem Statement The Research sought to find out whether the use of opioids like morphine... Analysis of ...
4 Pages(1000 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic DQ52 for FREE!

Contact Us