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Advanced Cost Accounting - Costs and Cost Allocation

Lavish Lamps produces high-quality lighting fixtures in its manufacturing plant. The fixtures are designed and manufactured according to the customer's specifications and are therefore made-to-order. The plant manager has provided you with the following list of key activities within the plant:
• Product design
• Production scheduling
• Purchasing department
• Receiving department
• Machine set-up
• Quality control
• Plant security
• Customer credit check
• Machine operation
• Maintenance
Required:
For each of these activities:
• Identify a cost object and a cost driver.
• How would you recommend recording each of these costs?
• How should these costs be allocated to lighting fixtures?
750 words and references need to review before paying to ensure covers to subject

Solution Preview

First and foremost, (you) as a student must conduct the identification of cost drivers and cost objects, but I will elucidate upon the information that will assist you in identifying these important accounting narratives. To understand how to effectively conduct this objective, (you) must first have an understanding on what constitutes a cost
object. These are unlimited in their actual representation as cost objects could literally constitute an indefinite amount of items, but the importance of these is placated upon the fact that they represent any product or department that accumulate costs in which the organization can measure these costs to assess how they affect the business.

The business must measure these costs to ascertain how labor, products, and direct materials directly impact or drive the expenses associated with the organization. An example for (your) assignment would ...

Solution Summary

Advanced cost accounting is analyzed. Costs and cost allocation are provided.

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