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You have been hired as a managerial accountant by Mr. Smith of Wilson-West Manufacturing, a start-up company that produces several different product lines. He would like you to set up the cost accounting system for the cabinet division. Listed below are your new job requirements and at least 1 task for each.
Compile a 2–3 page document (1,000–1,500 words) with all of the following task requirements:
- Your role as an accountantPrepare a job description that includes 3–4 typical duties of a managerial accountant.
- Types of costsExplain what types of costs you plan on using to distinguish the different types of cabinets that will be produced. Examples should include direct costs items, indirect costs items, as well as variable costing. In other words, include what are at least 5 types of expenses that are associated with manufacturing the cabinets?
- Cost accounting methodsExplain how product costing is used for a cabinet division.Give 2 examples of how you will use product costingWhich costing method will you use for the cabinet division: ABC, job order, or process costing? Validate your answer with 2–3 reasons for and 2–3 reasons against the other types of costing. Also, include examples of how you plan to use your chosen costs.
- Analysis for contribution margin, absorption, variable, throughput, and joint product costingUsing examples, discuss how each will be used in the cabinet department.Include a formula where necessary (contribution margin).Explain in detail where you will find the appropriate information or calculation.
- Fixed, Variable, Mixed Costs
- Must have references and any intext citations
Based on the cabinet division, give an explanation and 2 examples for each type of cost: fixed, variable, and mixed.
Assignment 2
| Deliverable Length: | 2–3 pages showing all calculations; 2 pages showing all calculations |
| Details: |
Weekly tasks or assignments (Individual or Group Projects) will be due by Monday and late submissions will be assigned a late penalty in accordance with the late penalty policy found in the syllabus. NOTE: All submission posting times are based on midnight Central Time. Key Assignment Draft Brian Miller is an entrepreneur. He started a small-town friendly grocery store. People stopped by his store to pick up things they did not want to run to the regular grocery store for. In 3 years, because of popular demand, he started adding more items on his shelf and pretty soon, he had grown into a regular grocery store. People loved his store because he knew everyone by their first name and would try to fulfill everyone’s requests. He now needs some help with his inventory. He hired a CPA firm that would give him some advice on how he should maintain his inventory. You are his CPA. You want to give Brian an overview on the inventory system, some different methods of recording cost of goods sold, and educate him on the accounting side of recording inventory and recording cost of goods sold. Part 1 Explain to Brian the perpetual and periodic inventory systems, covering the main differences between the two systems, and why companies use perpetual inventory system.Contrast the 4 methods of recording cost of goods sold:Specific identificationAverage costFirst in, First out (FIFO)Last in, Last out (LIFO)ABC, a grocery company, uses a periodic inventory system. They have the following information for the month of January:Beginning inventoryJan 1: 400 units @ $10 eachPurchasesJan 10: 300 units @$12 eachJan 15: 200 units @$15 eachSalesJan 5: 200 units @ $15 eachJan 12: 200 units @ $20 eachJan 18: 100 units @ $25 eachEnding inventoryJan 31: 400 unitsWill LIFO or FIFO generate the highest cost of goods sold? Why? Show all calculations.Will the ending inventory balance will be higher under LIFO or FIFO? Why? Show all calculations.What is the cost of goods sold under LIFO? Show all calculations.What is the cost of goods sold under FIFO? Show all calculations. |
