Question

Write an analytical summary of your learning outcomes from Process Costing and Cost Behavior. In addition to your analytical summary, address the following:

As a manager, discuss how you would use or have used the concepts presented in organization Process Costing and Cost Behavior. Provide numerical examples to support your discussion.

Please need a 350-word limit and 0% plagiarism this is full question

Answer 1

As a manager, discuss how you would use or have used the concepts presented in organization Process Costing and Cost Behavior.

Answer : -

Variance Analysis:

Process costing, focuses on fixed budgets, as well as performance analysis. A flexible budget is a budget that determines how changes in activity impact costs (Garrison, Noreen, & Brewer, 2018, pp 415). It provides estimates of what costs and revenues should have been in reference to the actual level of activity within a specified period. The moment a flexible budget is utilized in evaluating performance, actual costs are compared to expected costs instead of the static planning budget. This is important because discrepancies between the actual and budgeted costs are determined and interpreted. On the other hand, Cost behaviour discuss standard costs and associated variances. A standard is basically a benchmark that is used to measure performance. In most cases, standards are utilized in managerial accounting to relate quantity, as well as the acquisition price of inputs in manufacturing products. Here, quantity standards and price standards are used (Garrison, Noreen, & Brewer, 2018, pp 450).

As a manager, I would use a flexible budget to determine how changes in activity within the production department affect costs. I would evaluate the overall performance by comparing the actual costs and the budgeted costs (Garrison, Noreen, & Brewer, 2018, pp 415). On the other hand, I would use quantity standards to specify the amount of input to make a product. Also, I would use price standards to determine the amount of money that should be paid for every unit of output. This would be vital in making sure the available resources are fully maximized in manufacturing.

Managers might find a flexible-budget analysis more informative than static-budget analysis because flexible-budget analysis compares the actual costs to budgeted costs and actual revenues to budgeted revenues of a similar level of output, unlike the static-budget analysis. Additionally, flexible-budget analysis assists managers in gaining more informed insights on the actual causes of variances, unlike the static budgets.

A manager can gain insights into the causes of the variances in a flexible budget for direct labor, materials, and overheads by making adjustments for the level of activity. This is the only way a manager can interpret the discrepancies between the actual costs and the budgeted costs.