The importance of cost accounting plays a major role in our society, setting retail prices for merchandise and goods used by the consumer. Billions of dollars are spent each year on goods and services that the average consumer may rely heavily upon, so it is only in good moral standing to regulate and restrict the amount paid for such materials. In many countries including the United States the levels of income very from person to person. Regardless of the amount of money earned per individual, the costs for available products should be fair and not subject to dramatic exponential increases or decreases. Thus, the creation of a committee that determines a set price on all consumer goods, and devises a set of concrete standards that are to be lawfully followed by large corporations and businesses to the single individual. Realizing the usefulness of regulating cost accounting, a board to do just that, was formed, the Cost Accounting Standards Board (CASB) was founded.
The CASB consists of five members, which are the following; a Representative from the Department of Defense (DOD), an Officer from the General Service Administration (GSA), two individuals from the private sector, one from the industry, and the other an expert in the field, and the "Chairman", the Administrator of the Office of Federal Procurement Policy (OFPP). "The OFPP Administrator serves as Chair of the Cost Accounting Standards Board (CASB), an independent board which has exclusive authority to establish standards for use by contractors and subcontractors to achieve uniformity and consistency in the measurement, assignment and allocation of costs to government contracts. The CASB's cost accounting standards are promulgated as regulations. OFPP provides staff support to the CASB."
All members of the CASB except for the Chairman have four year terms. The Representative from the DOD and the Officer from the GSA can be appointed for additional terms. Both of whom, are subjected to dismissal if they are no longer employed within their distinguished agencies. Vacancies are inevitable, the DOD and GSA seats are filled no different than the appointees before them. "A vacancy on the Board shall be filled in the same manner in which the original appointment was made. A member may be reappointed for a subsequent term(s). Any member appointed to fill an interim vacancy on the Board shall serve for the remainder of the term for which his or her predecessor was appointed.
Based off of the data provided in the case study it would appear that under the traditional costing. Which are the cost that were incurred to produce OS-367. It appears that those cost were being allocated to GS-157 and HS-241. The cost per unit for OS-367 was $10 under the traditional costing system and the same has become $13.75 under the ABC system.
The managerial accounting system at Bridgeton, as it is presented, seems to be lacking detail necessary for efficient analysis. The sections used are sales, direct material, direct labor and overhead by account number, each divided into individual accounts and summed to find totals. There is no separation of fixed and variable costs in any of the accounts, making it difficult to analyze exactly where operations are costing money and, therefore, how they could possibly be improved. The presentation of the information groups all sales together and the different categories of costs together and does not provide for individual product analysis. The products are analyzed (categorized into classes) based on their costs, with no consideration to revenues associated with these products, and no real understanding of the overhead applied to each product. The overhead costs are applied to accounts based on labor and materials of the company as a whole, rather than using considerations associated with the individual products.
The USTA is managed by a Board of Directors which establishes the policies and objectives of the Association. The members of the BOD consist of 5 officers, the immediate Past President and nine directors-at-large. The voting members of the USTA are the Sectional Associations and Member Organizations whose voting strength is determined by the immediately preceding December 31st membership totals.
To help accounting professionals easily navigate through 50-plus years of unorganized US generally accepted accounting principles (GAAP) and standards the Trustees of the Financial Accounting Foundation approved the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification.) By codifying authoritative US GAAP, FASB will provide users with real-time and accurate information in one location. Concurrently, FASB developed the FASB Codification Research System; a web-based system allowing registered users to electronically research accounting issues. Since 2009, the codification became the single source of nongovernmental authoritative GAAP.
The corporation’s business is carried out by its management, under the direction of the Board of Directors. The Board, and each committee of the Board, has complete access to management. Also, the Board and committee member’s has access to independent advisors as each considers necessary or appropriate. Mallor, Barnes, Bowers, & Langvardt (2010) state that the Board of Directors also, issues shares, Adopts articles of merger or sha...
The PCAOB has the authorization to provide rules governing the following areas; ethics, independence, and quality control for any registered accounting firm...
Firstly, there is a mandatory assessment of the board’s performance every two years by an independent auditor. This is to ensure accountability. Additionally, there is now required online posting of board members’ and staffers’ travel expenses to lend to transparency.
The Financial Accounting Standards Board (FASB) has issued guidelines for reporting on discontinued operations April 10,2014. The rule reduce the number of disposal companies must present as discontinued operations in their financial operations in their financial statements. But they also expand the disclosures requirements when discontinued operations are reported. (LLP, 2014)
"College Accounting Coach." Process Costing-Definitions And Features(Part1) « Process Costing « Cost Accounting «. Feb. 2007. Web
Under the regulation, EASA remains to be responsible for all design approvals, along with airworthiness design organization approvals and environmental certification.
Others feel that ABC would be more widespread in industry if it were marketed better by the cost accounting profession itself [1]. As the dust has settled, ABC has turned out to be less a revolutionary technique than a useful refinement to proven systems. The costs of products and services must be accurate, or management can be misled. Decisions... ...
There are general rules and concepts that preside over the field of accounting. These general rules, known as basic accounting principles and guidelines, shape the groundwork on which more thorough, complex, and legalistic accounting rules are based. The Financial Accounting Standards Board (FASB) uses the basic accounting principles and guidelines as a foundation for their own comprehensive and complete set of accounting rules and standards.
Activity-based costing (ABC) is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore “fixed” as well as variable costs. Activity-based costing is mostly used for internal decision making and managing activities while traditional costing method is used to provide data for external financial reports. Most organization uses activity-based costing as an addition system for using traditional absorption costing as sometimes the traditional cost system misleads the product’s profitability. In a company, there are many products on sale, if one product is sold at a high price with low product margin and a product with high product margin at a low price, it may result in a loss. In addition, due to the reason that cost drivers and enterprises business may change, activity-based costing analysis also needs to be revised periodically. This amendment should be prompted to change pricing, product, customer focus and market share strategy to improve corporate profitability.
The revenue/cost period-: Revenue and the cost period in accounting that the company get income from normal business activities. It’s referred to normal business income that the company got by selling their product and service.
In management accounting, cost management has a crucial role and finds its foundations in understanding “cost behaviour”. “Cost behaviour analysis” can be defined as “the study of how cost changes when there is a change in an organisation’s level of activity”. (Definition https://www.accountingcoach.com/blog/what-is-cost-behavior).