Case study costing systems and cost control

Login The analysis uses a number of examples to highlight the significant differences in costs between the two systems, and the Impact that these variances have on the cuisines. It is concluded that the new system does provide a definite improvement over the existing one, based on the benefits perceived from its introduction versus the implementation costs envisaged.

Case study costing systems and cost control

V, 4 C y Inventory Management: The case ties together many of the concepts of inventory management including economic order quantity EOQjust- in-time JIT manufacturing, the relationship between production and job cost sheets, and backflush costing.

It also relates management of materials inventory with management of finished goods inventory. Unfortunately when some students study the different aspects of inventory management such as EOQ, safety stock, and backflush costing they treat these topics as discrete, unrelated topics although the topics are actually all tied together into one inventory management system.

This inventory management case brings together the following topics: For production of finished goods, which is related to the materials purchased in the first part of the case, topics include production cost, economic order quantity, just-in-time manufacturing, job cost sheets for the production of batches of product, journal entries in traditional format for production and sale of the goods, and backflush costing journal entries for the same production and sale of the goods.

food cost control. "Inemploying cost-controltechniques and cost accounting techniques, a manager should remember that the purpose is to find out what the costs are, whetherthey are out ofline (with the budget), and, ifso, where they are out ofline. Corrective action canthen be taken" (Keiser & . Analysis of Existing costing system The current system uses a single average hourly charge to allocate labor and overhead costs to the valve department. This rate is being calculated on a monthly basis by dividing the sum of the accumulated labor charges and department overheads by the number of . The purpose of this case study is to study the application of Activity Based Costing. in service sectors particularly higher learning institutions and whether this cost system. provides better control over the cost in comparison with the traditional costing system.

The scenario in which this case takes place is a ketchup manufacturing company Gloopy Ketchup with tomatoes as the direct materials.

The cost and quantities of tomatoes per bottle of ketchup are fairly realistic. However, the other numbers are not realistic but instead designed to yield, for the most part, round numbers as answers.

The Case Gloopy Ketchup Company makes and sells bottles of tomato ketchup. Annual demand is 24, bottles. Lead time for ordering is three days the time between placing the order and receiving the tomatoes. Calculate the EOQ economic order quantity for the tomatoes.

Find the number of orders Gloopy must place to satisfy the EOQ, and also find the reorder point. Use days for a year, not days. Find the optimal amount of safety stock to carry given the above information. Refer to the original information and the EOQ you calculated in part 1.

Case Study Series Inventory Management: A Case for Cost Accounting | 志广 李 - ashio-midori.com

Find the cost of prediction error using only the relevant costs ordering and carrying costs. Now let us move from the purchasing to the production aspect of the Gloopy Ketchup Company.

Gloopy uses a MRP materials requirements planning system to produce ketchup in batches of 2, bottles each month one batch per month. Based on your calculations, should they switch? Round number of setups per year up to next integer and remember to use that to recalculate number of units to produce in each run.

Case study costing systems and cost control

After intense examination of their own manufacturing system and how it would change in a JIT system, they have decided that they would make bottles of ketchup per batch.

Assuming carrying costs and variable product costs are not affected by the change to the JIT system, by how much would the setup costs have to decrease per setup to make Gloopy indifferent between the JIT and the MRP system?

What is Activity-Based Costing?

Name two things you think might reduce the setup costs for Gloopy Ketchup if they switch to the JIT system. Although the answer is subjective, it should also be realistic. On April 1 Gloopy purchases enough tomatoes to satisfy the EOQ you calculated in 1, plus any safety stock you decided they need in requirement 3.

All other manufacturing costs are classified as conversion costs. They also start production of bottles of ketchup call this Joband finish on April 3.

After finishing that production run, they begin another run of bottles on April 6 Jobalthough two units were damaged in process and they only had good bottles on April 9 when they finished the batch.Download Citation on ResearchGate | Assessment of cost control systems: A case study of Thai construction organizations | The most important function that facilitates construction organizations to accomplish profit maximization is cost control.

Lorson Manufacturing Company Case Study Executive Summary Lorson Manufacturing Company is actively seeking to implement tighter cost control measures in an industry that is .

Case study: Manufacturing Supply Chain Logistics & Inventory Control A specialty chemical company with worldwide operations serving the electronics, surface finishing, and decorative industries engaged Daniel Penn Associates to improve its supply chain logistics and inventory control systems.

The purpose of this case study is to study the application of Activity Based Costing. in service sectors particularly higher learning institutions and whether this cost system. provides better control over the cost in comparison with the traditional costing system. The case ties together many of the concepts of inventory management including economic order quantity (EOQ), just- in-time (JIT) manufacturing, the relationship between production and job cost sheets, and backflush costing.

It also relates management of materials inventory . Introducing Target Costing in Cost Planning and Control: a case study in a Brazilian Construction Firm As a result, traditional cost control systems have been much more useful to manage contracts than production (Howell and Ballard, ).

This case study was part of a research project that had as one of its main objectives the.

Case study: on costing systems and cost control | Case Study Template