Building Blocks of Managerial Accounting Application & Analysis Costs in the Val

Question

Building Blocks of Managerial Accounting Application & Analysis Costs in the Value Chain at a Real Company and Cost Objects Choose a company with which you are familiar that manufactures a product. In this activity, you will be making reasonable assumptions about the activities involved in the value chain for this product; companies do not typically publish information about their value chain. Basic Discussion Questions Describe the product that is being produced and the company that produces it. Describe the six value chain business activities that this product would pass through from its inception to its ultimate delivery to the customer. List at least three costs that would be incurred in each of the six business activities in the value chain. Classify each cost you identified in the value chain as either being an inventoriable product cost or a period cost. Explain your justification. A cost object can be anything for which managers want a separate measurement of cost. List three different potential cost objects other than the product itself for the company you have selected. List a direct cost and an indirect cost for each of the three different cost objects in question 5. Explain why each cost would be direct or indirect.

Explanation / Answer

The product referred is a hudraulic brake set used in cars. The main cylinder in manufactured in the factory in the machining department from steel tubes procured from vendors and the set is finished by assembling it with other bought out items in the Assembly department. Q 2/3/4 Value Chain Activities Costs Inventoriable/period Reamarks        1 Inbound Logistics 1. Warehousing cost Period As this does not make part of prodcu cost or overhead 2. Freight In Inventoriable   As part of inventory cost 3. Salary of Material receipt clerk. Period As this does not make part of prodcu cost or overhead        2 Production Process 1.. Direct Material cost Inventoriable   Part of Product cost 2. Direct Labor   Inventoriable   Part of Product cost 3. Machine depreciation Inventoriable   Part of factory overhead        3 Quality Control 1. Quality Control Staff salaries Inventoriable   Part of factory overhead 2. External Quality Audit Cost Period As this does not make part of prodcu cost or overhead 3. Depreciation of Quality control equipments Inventoriable   Part of factory overhead        4 Outbound logictics 1. Transport Out Period As this does not make part of prodcu cost or overhead 2. Salary of despatch staff Period As this does not make part of prodcu cost or overhead 3. Office stationery for invoice printing. Period As this does not make part of prodcu cost or overhead        5 Marketing & Sales   1. Sales Commission Period As this does not make part of prodcu cost or overhead 2. Salary of Sales Manager Period As this does not make part of prodcu cost or overhead 3. Advertising Cost Period As this does not make part of prodcu cost or overhead Period As this does not make part of prodcu cost or overhead        6 Cutomer Service 1. Salary of customer service staff Period As this does not make part of prodcu cost or overhead 2. Post sales repair cost Period As this does not make part of prodcu cost or overhead 3. Warranty cost Period As this does not make part of prodcu cost or overhead Q 5/6 Cost Objects Cost Objects Costs   Direct/indirect Remarks Maintenance Department 1. Spares consumed for maintenance 1. Direct cost As directly traceable to the object 2. Allocation of Electricty cost 2. Indirect as it is allocation and not directly traceable to object 3. Annual Maintenance contract cost outsourced to machine supplier 3. Direct cost As directly traceable to the object An Internal Order for   1. Equipment purchase cost 1. Direct cost As directly traceable to the object New Equipment to be   2. Modification cost of equipment 2. Direct cost As directly traceable to the object capitalized 2. Tranport cost for the equipment 3. Direct cost As directly traceable to the object An advertisement campaign for spreading the awarness for using ABS break technology   1. Advertisement cost in Auto Magazines 1. Direct cost As directly traceable to the object 2. Leaflet printing cost for use in car showrooms 2. Direct cost As directly traceable to the object 3. Transport reimburement to sales staff   3. Indrect cost   as it is allocation and not directly traceable to object

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.