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Accounting- Cost Behavior, Cost Allocation, and Budget

In: Business and Management

Submitted By piup
Words 2670
Pages 11
Individual Assignment
HRMT 317

Introduction

Costs are linked with all types of organizations- business, nonbusiness, manufacturing, retail and service. Cost behavior, Cost accounting & allocation, and Budget- these are the three key requirements to run any business nowadays. Measuring cost behavior (cost measurement) is associated with understanding and calculating how activities of an organization affect different levels of cost. On the other hand, cost accounting is a kind of accounting method that targets to capture an organization’s costs of production by evaluating the input costs of each step of production as well as fixed costs. Then, cost allocation is the allocating of a common cost to several cost substances. Additionally, budget is an estimate of earnings and expenses for a set period of time. These are commonly used terms in financial accounting information as well as in any business. My company is called The EBag Co. Ltd, which is in business for more than 5 years in the production sector of the market. This profitable business is earning its profits by manufacturing affordable bags for consumers of all ages. My company will use these three requirements of this assignment to make business more profitable in coming days. I will use the five methods (will talk about only 3) of measuring cost function for my company to identify which costs will change and which will remain the same with changes in sales volume. Then, I will use cost allocation chart to help me to identify what services I am providing in my company and what each of them cost and to allocate costs to business units. Lastly, having a well-planned budget and knowing how to use it sufficiently will help me to flourish my business. I will provide you with my conclusion at the end of this assignment. I will use at least 2 references to improve this assignment (I can’t use...

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