Absorption and Marginal Costing Methods

Absorption and Marginal Costing Methods Absorption costing treats the costs of all manufacturing components (direct material, direct labour, variable overhead and fixed overhead) as inventoriable or product costs in accordance with generally accepted accounting principles (GAAP), (BARFIELD et al., 2001). 1.2 Marginal Costing Variable costing is a cost accumulation method that includes only variable production costs (direct material, direct labour, and variable overhead) as product or inventoriable costs. (BARFIELD et al., 2001) 1.3 Similarities between Both Methods Marginal costing Absorption costing Closing inventories are valued at marginal production cost. Closing inventories are valued at full production cost. Fixed costs are period costs. Fixed costs are absorbed into unit costs. Cost of sales does not include a share of fixed  overheads. Cost of sales does include a share of fixed overheads 1.4 Influences of Marginal and Absorption costing on the pricing policy Pricing decisions: Since marginal cost per unit is constant from period to period within a short span of time, firm decisions on pricing policy can be taken, If fixed cost is included, the unit cost will change from day to day depending upon the volume of output. Overhead Variances: Overheads are recovered in costing on the pre-determined rates. This creates the problem of treatment of under or over-recovery of overhead, if fixed overhead were included Marginal costing avoids such under or over recovery of overheads. True profit: It is argued that under the marginal costing technique, the stock of finished goods and work-in-progress are carried on marginal cost basis and the fixed expenses are written off to profit and loss account as period cost. This shows the true profit of the period. Break-even analysis: Marginal costing helps in the preparation of break-even analysis, which shows the effect of increasing or decreasing production activity on the profitability of the company. Control over expenditure: Segregation of expenses as fixed and variable helps the management to exercise control over expenditure. The management can compare the actual variable expenses with the budgeted variable expenses and take corrective action through, variance analysis. Business decision-making: Marginal costing helps the management in taking a number of business decisions like make or buy, discontinuance of a particular product, replacement of machines etc.) (BRAGG, STEVEN M., 2007) 1.4.1 Influences of Marginal Costing It recognizes the importance of fixed costs in production; This method is accepted by Inland Revenue as stock is not undervalued; This method is always used to prepare financial accounts; When production remains constant but sales fluctuate absorption costing will show less fluctuation in net profit and Unlike marginal costing where fixed costs are agreed to change into variable cost, it is cost into the stock value hence distorting stock valuation. (Accounting for management) (BRAGG, STEVEN M., 2007) 1.4.2 Influences of Absorption Costing (It is simple to operate. There are no apportionments, which are frequently done on an arbitrary basis, of fixedcosts. Many costs, such as the marketing directors salary, are indivisible by nature. Fixed costs will be the same regardless of the volume of output, because they are period costs. It  makes sense, therefore, to charge them in full as a cost to the period. The cost to produce an extra unit is the variable production cost. It is realistic to value  closing inventory items at this directly attributable cost. Under or over absorption of overheads is avoided. Marginal costing provides the best information for decision making.) (KAPLAN, 2008) Classifications of cost systems in terms of object: function, product (services) and behaviour, analysing probable causes of cost variances and offer directors the needed advice to improve performance. 2. Cost by Object 2.1.1 Direct Cost Direct costs are costs which can be directly identified with a specific cost unit or cost centre. There are three main types of direct cost: Direct materials for-example, cloth for making shirts Direct labour for-example, the wages of the workers stitching the cloth to make the shirts Direct expenses for-example, the cost of maintaining the sewing machine used to make the shirts. 2.1.2 Indirect Cost Indirect costs are costs which cannot be directly identified with a specific cost unit or cost centre. Examples of indirect costs include the following: The total of indirect costs is known as overheads. indirect materials these include materials that cannot be traced to an individual shirt, for example, cotton indirect labour for example, the cost of a supervisor who supervises the shirt makers Indirect expenses for example, the cost of renting the factory where the shirts are manufactured. 2.2 Cost by Function 2.2.1 Production Cost Production costs are the costs which are incurred when raw materials are converted into finished goods and part finished goods (work in progress). 3.2.2 Non-Production Cost 2Nonproduction costs are costs that are not directly associated with the production processes in a manufacturing organisation. 2.3 Cost by behaviour 2.3.1 Variable Cost Variable costs are costs that tend to vary in total with the level of activity. As activity levels increase then total variable costs will also increase. Note that as total costs increase with activity levels, the cost per unit of variable costs remains constant. Examples of variable costs include direct costs such as raw materials and direct labour 2.3.2 Fixed Cost A fixed cost is a cost which is incurred for an accounting period, and which, within certain activity levels remains constant. Note that the total cost remains constant over a given level of activity but the cost per unit falls as the level of activity increases. (KAPLAN, 2008) Examples of fixed costs: rent business rates Executive salaries. 2.3.3 Stepped Fix Cost This is a type of fixed cost that is only fixed within certain levels of activity. Once the upper limit of an activity level is reached then a new higher level of fixed cost becomes relevant. Examples of stepped fixed costs: Warehousing costs (as more space is required, more warehouses must be purchased or rented) Supervisors wages (as the number of employees increases, more supervisors are required). 2.3.4 Semi Variable Cost Semi variable costs contain both fixed and variable cost elements and are therefore partly affected by fluctuations in the level of activity. †¢ Semi variable costs can be shown graphically as follows Examples of semi variable costs: Electricity bills (fixed standing charge plus variable cost per unit of electricity consumed) Telephone bills (fixed line rental plus variable cost per call) 2.4 Cause of Cost Variances (Sales price variances may be caused by: unplanned price increases (sales price variance) unexpected fall in demand due to recession (sales volume variance) Materials price variances may be caused by: supplies from different sources unexpected general price increases Materials usage variances may be caused by: a higher or lower incidence of scrap an alteration to product design Labour efficiency variances may be caused by: changes in working conditions or working methods, for example, better supervision consequences of the learning effect) (BPP, 2007) Responsibility accounting as a system of planning and control of the organisation. 3. Responsibility Centres Responsibility accounting systems identify, measure, and report on the performance of people controlling the activities of responsibility centres. Responsibility centre sari classified according to their managers scope of authority and type of financial responsibility. Companies may define their organizational units in various ways based on management accountability for one or more income-producing factors-costs, revenues, profits, and/or asset base. (BARFIELD et al., 2001) 3.1 Cost Centres In a cost centre, the manager has the authority only to incur costs and is specifically evaluated on the basis of how well costs are controlled. Theoretically, revenues cannot exist in a cost centre because the unit does not engage in revenue producing activity. Cost centres commonly include service and administrative departments. For example, the equipment maintenance centre in a hospital may be a cost centre because it does not charge for its services, but it does incur costs. (BARFIELD et al., 2001) 3.2 Revenue Centre A revenue centre is strictly defined as an organizational unit for which a manager is accountable only for the generation of revenues and has no control over setting selling prices or budgeting costs. In many retail stores, the individual sales departments are considered independent units, and managers are evaluated based on the total revenues generated by their departments. Departmental managers, however, may not be given the authority to change selling prices to affect volume, and often they do not participate in the budgeting process. Thus, the departmental managers might have no impact on costs. (BARFIELD et al., 2001) 3.3 Profit Centre In a profit centre, the manager is responsible for generating revenues and planning and controlling expenses related to current activity. (Expenses not under a profit centre managers control are those related to long-term investments in plant assets; such a situation creates a definitive need for separate evaluations of the subunit anther subunits manager.) A profit centre managers goal is to maximize the centres net income. (BARFIELD et al., 2001) 3.4 Investment Centre An investment centre is an organizational unit in which the manager is responsible for generating revenues and planning and controlling expenses. In addition, the centres manager has the authority to acquire, use, and dispose of plant assets in a manner that seeks to earn the highest feasible rate of return on the centres asset base. (BARFIELD et al., 2001)

Slaverys Coexistence with Other Economic Systems :: A Respectable Trade Capitalism Slavery Essays

Slavery's Coexistence with Other Economic Systems Slavery as economic order based on the ownership and exploitation of human beings as property is widely covered in A Respectable Trade. The film, however, does not solely reveal slavery and its characteristics. It is a film rich in reference to other economical orders as well, because besides elaborately showing from different aspects the processes typical for the establishment of slavery, it touches on and gives examples on economic relationships that are rather characterized as capitalist, feudal or self-employment-related. The action in A Respectable Trade takes place in 1788 in the English city of Bristol, starting with the marriage between Frances Scott and Josiah Cole. Frances, an educated and refined young woman of genteel origin, is left poor and with no inheritance after the death of her father. For lack of a better alternative, she marries the rough and uneducated Josiah who trades with ships, led by the motive to import slaves directly to England, have them educated and polished by his wife, and sell them as house servants at a better price . Josiah is far from successful in his trade: he only manages to import eight slaves and eventually to sell only two of them. However, this is enough to elucidate the main characteristics of slavery as an economic order. The arrival of his slaves, the process of educating them and their final escape represent a peculiar slavery-cycle that elaborates on important economic issues such as the slaves' status, the creation of subservient attitude in them (or at l east the attempt to), the strategies of breaking up their independent spirits, and their resistance. A typical characteristic of slavery is that slaves are considered just another element of the productive resources. They are regarded as property, as chattel, and can be freely sold as such. Never considered human beings with consciousness and will, slaves are often described with the term 'instrumentum vocale', meaning that they are seen just as instruments capable of producing human speech. Naturally, like any human beings, slaves have a consciousness of free and independent people, and it takes time and effort to impose on them an attitude of subservience and obedience, a consciousness of being no longer human beings but enslaved pieces of property. In A Respectable Trade that is achieved in several different ways. Firstly, the slaves are imported by ships to England - extremely far from their homeland, especially in the context of the 18th century. Slavery's Coexistence with Other Economic Systems :: A Respectable Trade Capitalism Slavery Essays Slavery's Coexistence with Other Economic Systems Slavery as economic order based on the ownership and exploitation of human beings as property is widely covered in A Respectable Trade. The film, however, does not solely reveal slavery and its characteristics. It is a film rich in reference to other economical orders as well, because besides elaborately showing from different aspects the processes typical for the establishment of slavery, it touches on and gives examples on economic relationships that are rather characterized as capitalist, feudal or self-employment-related. The action in A Respectable Trade takes place in 1788 in the English city of Bristol, starting with the marriage between Frances Scott and Josiah Cole. Frances, an educated and refined young woman of genteel origin, is left poor and with no inheritance after the death of her father. For lack of a better alternative, she marries the rough and uneducated Josiah who trades with ships, led by the motive to import slaves directly to England, have them educated and polished by his wife, and sell them as house servants at a better price . Josiah is far from successful in his trade: he only manages to import eight slaves and eventually to sell only two of them. However, this is enough to elucidate the main characteristics of slavery as an economic order. The arrival of his slaves, the process of educating them and their final escape represent a peculiar slavery-cycle that elaborates on important economic issues such as the slaves' status, the creation of subservient attitude in them (or at l east the attempt to), the strategies of breaking up their independent spirits, and their resistance. A typical characteristic of slavery is that slaves are considered just another element of the productive resources. They are regarded as property, as chattel, and can be freely sold as such. Never considered human beings with consciousness and will, slaves are often described with the term 'instrumentum vocale', meaning that they are seen just as instruments capable of producing human speech. Naturally, like any human beings, slaves have a consciousness of free and independent people, and it takes time and effort to impose on them an attitude of subservience and obedience, a consciousness of being no longer human beings but enslaved pieces of property. In A Respectable Trade that is achieved in several different ways. Firstly, the slaves are imported by ships to England - extremely far from their homeland, especially in the context of the 18th century.

Communication Styles Essay

Identifying with your personal style of communicating will help you in the long run to create good communication skills. There are four different communications styles which are passive, assertive, aggressive and passive aggresive that we all can identify with. Knowing about the many styles of communication can help you to adapt to others and their style of communication. Passive communication is one of the four different communication styles. Passive communication is shown when individuals fail to express their opinions, feelings, needs and show low self-esteem. I don’t identify with this style of communicating because this isn’t me. When I feel the need to express myself I do so. I always stand a hundred and ten percent behind my opinion and I never let others step over me. Aggressive communication is very different from passive communication. Being a aggressive communicator you express your feelings and opinion. Aggressive communicators can often be verbally abusive because of past situations such as they may have experienced physical and or emotional abuse or still carrying around unhealed wounds. Aggressive communicators will often try to be the dominate one and control others. They speak in a very loud demanding voice and act rudely. I myself can be aggressive from time to time in situations. For example if my boyfriend makes me mad I began to speak in a loud overbearing tone and will not listen to anything he has to say. Being an aggressive communicator will unable you to mature . Passive-aggressive communication is a style that on the outside they show to be passive but act out of anger because of feeling powerless. Passive-aggressive communicators will use sarcasm, deny that there is a problem and will sabotage you to get even. I personally cannot relate to this style of communication. If I have a problem I will gladly let you know what the issue is. Also I do not believe in sabotaging others, you will get your karma, as they say what goes around comes back around. Assertive communication is the last style of communication. It is a style in which one believe on speaking up about their opinions and feelings. Assertive communicators show high self-esteem and value everything about themselves such as their time, emotions and needs. Assertive communicators will stand up for their rights but yet be respectful about it. They also listen well and respect others and speak in a calm tone. I find myself being an assertive communicator the most especially in disagreements. I let others know how I feel but at the same time I still respect them and how they feel. Assertive communication is one of the best styles of communication because it creates an respectful environment and allows you to be mature enough to address issues as they arise.

Indian Citizenship Act of 1924

The Indian Citizenship Act of 1924, also known as the Snyder Act, granted full U.S. citizenship to Native Americans. While the Fourteenth Amendment to the U.S. Constitution, ratified in 1868, had bestowed citizenship on all persons born in the United States—including former slaves—the amendment had been interpreted as not applying to indigenous native people. Enacted partially in recognition of the Native Americans who had served in World War I, the act was signed into law by President Calvin Coolidge on June 2, 1924. Though the act granted Native Americans U.S. citizenship, it did not ensure them the right to vote. Key Takeaways: Indian Citizenship Act The Indian Citizenship Act of 1924, signed into law by President Calvin Coolidge on June 2, 1924, granted U.S. citizenship to all Native American Indians.The Fourteenth Amendment had been interpreted as not granting citizenship to indigenous native people. The Indian Citizenship Act was enacted partly as a tribute to American Indians who had fought in World War I.While it granted Native Americans citizenship, it did not grant them the right to vote. Historical Background Ratified in 1868, the 14th Amendment had declared that all persons â€Å"born or naturalized in the United States, and subject to the jurisdiction thereof† were American citizens. However, the â€Å"jurisdiction thereof† clause was interpreted to exclude most Native Americans. In 1870, the U.S. Senate Judiciary Committee declared â€Å"the 14th amendment to the Constitution has no effect whatever upon the status of the Indian tribes within the limits of the United States.† By the late 1800s, about 8% of Native people had qualified for U.S. citizenship due to being â€Å"taxed,† serving in the military, marrying whites, or accepting land allotments offered by the Dawes Act.   Enacted in 1887, the Dawes Act was intended to encourage Native Americans to abandon their Indian culture and â€Å"fit in† to mainstream American society. The act offered full citizenship to those Native Americans who agreed to leave their tribal lands to live on and farm free â€Å"allotments† of land. However, the Dawes Act had a negative effect on Native Americans on and off the reservations. Native Americans who had not already done so by other means won the right to full citizenship in 1924 when President Calvin Coolidge signed the Indian Citizenship Act. While the stated purpose was to reward the thousands of Indians who had served in World War I, Congress and Coolidge hoped the act would break apart the remaining Native nations and force Native Americans to assimilate into white American society. Text of the Indian Citizenship Act of 1924 â€Å"BE IT ENACTED by the Senate and house of Representatives of the United States of America in Congress assembled, That all non-citizen Indians born within the territorial limits of the United States be, and they are hereby, declared to be citizens of the United States: Provided That the granting of such citizenship shall not in any manner impair or otherwise affect the right of any Indian to tribal or other property.† Native American Voting Rights For whatever reasons it was enacted, the Indian Citizenship Act did not grant Native people voting rights. Except for the 15th and 19th Amendments, which ensure African Americans and women the right to vote in all states, the Constitution grants the states the power to determine voting rights and requirements. At the time, many states opposed allowing Native people to vote in their states. As a result, Native Americans were forced to secure the right to vote by winning it in the individual state legislatures. Not until 1962 did New Mexico become the last state to guarantee voting rights for Native Americans. However, like black voters, many Native Americans were still prevented from voting by poll taxes, literacy tests, and physical intimidation. In 1915, the U.S. Supreme Court, in the case of Guinn v. United States, declared literacy tests unconstitutional and in 1965, the Voting Rights Act helped protect the voting rights of Native people in all states. However, the Supreme Court’s 2013 decision in Shelby County v. Holder dismantled a key provision of the Voting Rights Act requiring states with a history of racial bias in voting to get the permission of the U.S. Department of Justice before enacting new voter qualification laws. Weeks before the 2018 midterm elections, the North Dakota Supreme Court upheld a voting requirement that may have prevented many of the state’s Native American residents from voting. Native American Opposition to Citizenship Not all Native people wanted U.S. citizenship. As members of their individual tribal nations, many worried that U.S. citizenship might endanger their tribal sovereignty and citizenship. Particularly outspoken against the act, leaders of the Onondaga Indian Nation felt that forcing U.S. citizenship on all Indians without their consent was â€Å"treason.† Others hesitated to trust a government that had taken their land by force, separated their families, and brutally discriminated against them. Others remained adamantly opposed to being assimilated into white American society at the cost of their Indian culture and identity. Tribal leaders who supported act considered it a path to establishing a national political identity that would give their people a more influential voice in issues affecting them. Many Native Americans felt the government now had an obligation to protect them. They believed that, as U.S. citizens, the government would be required to protect them from white businessmen trying to steal their government-granted land. Sources and Further Reference NCC Staff. On this day, all Indians made United States citizens. National Constitution Center: Constitution Daily.. 1924 Indian Citizenship ActNational Park Service.Hass, Theodore H. (1957). The Legal Aspects of Indian Affairs from 1887 to 1957. American Academy of Political and Social Science.Bruyneel, Kevin. Challenging American Boundaries: Indigenous People and the Gift of U.S. Citizenship. Studies in American Political Development. . Letter of Onondaga Nation to Calvin CoolidgeThe Onondaga Nation and the Haudenosaunee.