Costing Systems and Business Applications

This assignment analyzes various costing systems employed across diverse businesses like construction, car servicing, and car manufacturing. It delves into the pros and cons of marginal and absorption costing methods, highlighting their applications in different sectors. The paper concludes by emphasizing the impact of a robust accounting system on organizational success and financial planning.

REPORT

INTRODUCTION
Accounting is the most essential part of the organisation accounting measures are
helpful to identify the best productive resources. Present report will be based on accounting
classes which will be explaining more about accounting scenario marginal costing and
absorption costing which helps to clear accounting thoughts and learning of accounting. For
present study Hotel Qbic will be taken into action.
PART 1
(a) identify and describe the relevant stakeholders
Stakeholders are the essential part of the organisation or best source of income will
improve company image and sells (Wang, 2014). There are many types' stakeholder who affect
company business activities.
Customers: Buyers is the first stakeholder for Qbic hotel for which hotel adopt the best
strategies and action plan to grab the productive method of growth.
Suppliers: in order to identification suppliers are the another stakeholder for the
company which might be affect company by giving low quality of materials. Company cannot
afford low quality of products in order to sustain their quality. For that, organization needs to
maintain good relation with suppliers (Hoyle, Schaefer and Doupnik, 2015).
Government: Every organisation needs to acquire some legal implications and
regulations in order to meet the needs of organisation. It will also make sure about the best
productive manner of growth.
Investors: Investors are the another stakeholders who might be given productive task
making product fruitful and productive. Investors must be satisfied with the company for
making good investment process.
(b) Explain how the construction of the financial statements meet their needs.
It is the foremost duty of the organisation to meet the needs of financial in order to full
fill company daily needs and wants. It is required for the company to adopt the best productive
matter of fact (De Simone, 2016). The method to meet the needs of financial statement
company needs to make proper budget tools and techniques. The main objectives of the
financial growth is that to provide information about financial position, performance and cash
flow of an enterprise. According to the financial statements company needs to acquire the best
productive task for making good growth. Majorly financial statement includes balance sheet,
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income statement, cash flow statement and statement of changes. Such as balance sheet helps
to measure the productive task making things. Besides, cash flow includes cash outflow and
cash inflow (Brown, Preiato and Tarca, 2014). Income statement includes revenues, assets and
liabilities. Along with that it also takes some more advantage tool to full fill the basis
acquirement.
PART 2
(a) Describe the advantages and disadvantage of absorption and marginal costing
Absorption costing
Advantages
 It helps to analyse best cost control activities for the business growth.
 Absorption costing takes into account to deep analysation of cost of production not just
direct like variable costing ((Backof, Bamber and Carpenter, 2016)).
 It also helps to recognize fixed cost in production
Disadvantage
 Absorption costing might be not productive for the company profit revenue
 It fails to provide productive analysation of good of cost.
Marginal costing
Advantages
 It is one of the simplest techniques to operate ((Backof, Bamber and Carpenter, 2016)).
 It helps to show more clear impact on profit of fluctuations in the volume of sales.
 Marginal costing connect with standard costing.
Disadvantage
 Total cost cannot be calculated in easy into fixed costs and variable costs.
 In this process tax authorities do not accept the valuation of stock.
(b) identify the costing system each of the type of business listed below:
Kwik Fit rubbish specialising in servicing cars: in according to the car servicing business .
Owner required to maintained all parts of the cars, vans or other vehicle they serviced. Other
cost effective which impact on the business costing (Backof, Bamber and Carpenter, 2016).
Car servicing business facing cost includes, car equipments, car tools, material to wash the
cars, machines etc. these material includes heavy costing in this business.
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Construction works: it is the business which works on large scale or for log duration.
It includes heavy costing to business owner. They require making all plans in efficient manner
or in order to reduce cost. Besides, it is necessary to involves the best quality of material to
build offices or building. It requires facing high cost involvement. Besides, another cost of
labour or employees salary (Backof, Bamber and Carpenter, 2016). Overall, construction
company needs to set their costing system or make budget plan in more productive manner.
Construction work costing includes labour cost, raw material cost, process costing etc.
Car manufacturing industry: Car manufacturing business is the highly expensive
business activity which includes, several activities and target market growth. Car
manufacturing industry is highly demanding and high quality raw material. Along with that, it
also very necessary to make work in more productive manner. Car manufacturing company
includes high growth and managerial factors which enhance the capacity level of the company.
Costing system of this company is depends upon the process of working areas. Auto mobile
company always adopt high quality of material and well educated staff to make product
productive (Backof, Bamber and Carpenter, 2016). For that company requires to invest high
amount fund as well. In order to maintain costing system. They need to hire the best financial
manager to manage productive manner. Moreover, car manufacturing companies are highly
productive and productive nature of work. It involves several uses of task and productive
manner of work. It also helps to identify the best productive method to implement best
opportunity target.
CONCLUSION
From the above report it can conclude that, accounting system is complex part of the
organisation. For which financial manger requires making productive impression on the
financing statement. Present report discussed about the advantages and disadvantage of
marginal or absorption costing. Besides, it also looked upon the costing system on different
business area such as car servicing, car manufacturing and construction company. Besides, it
also discussed about accounting system which gives positive impact on the company behaviour
and also helps to make the best financial plan for company success and growth factor.
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REFERENCES
Books and Journals
Backof, A. G., Bamber, E. M. and Carpenter, T. D., 2016. Do auditor judgment frameworks
help in constraining aggressive reporting? Evidence under more precise and less precise
accounting standards. Accounting, Organizations and Society. 51. pp.1-11.
Brown, P., Preiato, J. and Tarca, A., 2014. Measuring country differences in enforcement of
accounting standards: An audit and enforcement proxy. Journal of Business Finance &
Accounting. 41(1-2). pp.1-52.
De Simone, L., 2016. Does a common set of accounting standards affect tax-motivated income
shifting for multinational firms?. Journal of Accounting and Economics, 61(1), pp.145-
165.
Hoyle, J. B., Schaefer, T. and Doupnik, T., 2015. Advanced accounting. McGraw Hill.
Wang, C., 2014. Accounting standards harmonization and financial statement comparability:
Evidence from transnational information transfer. Journal of Accounting
Research. 52(4). pp.955-992.
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