Navarro Steel: All About Cost Assessment Answer

Answer:

Introduction

Companies while accumulating cost use two types of method. Job order or a process costing systems is generally used while doing it. This usually varies on the kind of product or service which the company provides to its customers. Mainly the, pharmaceuticals, chemical processing, plastics, tile manufacturing, semi-conductor chips, beverages and cold drinks, and breakfast cereals use the method of process costing to accumulate their cost. (Kinney & Raiborn, 2012)When costs are shown in the process, separate costs are separated into cost categories in process costing system according to different timings. Navarro Steel uses the process costing method for cost accumulation. Now we shall study further about process costing through its real life application in the above mentioned industry.


Type of cost accumulation system used

Process costing is the method used here. According to CIMA process costing is used in places where many continuous operations are used which result in the outcome of goods. During the period, calculation of units produced usually calculates the average cost. (Drury, 2007) The sub unit of an organization is referred to as a process specially defined for cost collection purpose.

The key points in process costing follow:

Step 1: It usually involves the summarizing of the flow of units of output.

Step 2: Computation of output on the basis of equivalent units.

Step 3: To summarize the total costs that has to be accounted for.

Step 4: Computation of cost of each equivalent unit.

Step 5: Assignment of total costs to unit that has been completed.

Usage of Process Costing System and Allocation of Overheads

Navarro Steel is a steel production factory. Its processes and procedures are

  1. melt iron ore,
  2. In the process of adding alloys, material is usually skimmed so that tensile strength and flexibility could be adjusted.
  3. Oxygen extrudes the material and gives the material its finished form (I-Beams, sheet steel, coils, etc.).

Accountants have come up with the idea of equivalent unit, which can be described as a physical unit which could be expressed in terms of final goods to deal with continuous processes cost allocation through process costing. (Robinson, 2009) Overheads are applied on this basis only but if due to any reason, they are applied on some other basis such as that of machine hours then a separate method of equivalency will be used for labor and overheads which would be very difficult and a lengthy process to account for

Benefits to the Company through cost accumulation

Through application of process costing system the company reduced its bookkeeping work as in this method unit costs are more like averages. It provides exact matching of the cost of the product against the revenues which are earned through related sales and ensures that the costs of the product are transferred from final goods to the cost of goods the has been sold as sales. (Hnasen, Mowen, & Guan, 2007) It is an effective and corrective measure providing maintain over the manufacturing process. Managers are provided with feedback which is used for month wise comparisons. It ensures that the costs are kept in line with the projected manufactured budgets. It allows the senior managers to identify and deal with the insufficiencies within the supply chain.IRS also uses the reports for tax computations. Application of the process costing enhances uniformity all along the organization and the members of the manufacturing supply chain are synced appropriately

Conclusion

These industries have a large number of departments and the goods passes through a large number of processes. Its own budget is prepared by each of these departments. Thus proper process costing should be in place for compilation of each group’s respective costs that they undertook.

References

Drury, C. (2007). Management and Cost Accounting. Boston: Cengage Learning EMEA.

Hnasen, D., Mowen, M., & Guan, L. (2007). Cost Management: Accounting and Control. Boston: Cengage Learning.

Kinney, M., & Raiborn, C. (2012). Cost Accounting: Foundations and Evolutions. Boston: Cengage Learning.

Robinson, R. (2009). Cost. New York City: HarperCollins UK.

Download Sample Now

Earn back money you have spent on downloaded sample



Upload Document Document Unser Evaluion Get Money Into Your Wallet



Cite This work.

To export a reference to this article please select a referencing stye below.

Assignment Hippo (2022) . Retrive from https://assignmenthippo.com/sample-assignment/navarro-steel-all-about-cost-assessment-answer

"." Assignment Hippo ,2022, https://assignmenthippo.com/sample-assignment/navarro-steel-all-about-cost-assessment-answer

Assignment Hippo (2022) . Available from: https://assignmenthippo.com/sample-assignment/navarro-steel-all-about-cost-assessment-answer

[Accessed 24/05/2022].

Assignment Hippo . ''(Assignment Hippo,2022) https://assignmenthippo.com/sample-assignment/navarro-steel-all-about-cost-assessment-answer accessed 24/05/2022.


Buy Navarro Steel: All About Cost Assessment Answers Online

Talk to our expert to get the help with Navarro Steel: All About Cost Assessment Answers from Assignment Hippo Experts to complete your assessment on time and boost your grades now

The main aim/motive of the finance assignment help services is to get connect with a greater number of students, and effectively help, and support them in getting completing their assignments the students also get find this a wonderful opportunity where they could effectively learn more about their topics, as the experts also have the best team members with them in which all the members effectively support each other to get complete their diploma assignment help Australia. They complete the assessments of the students in an appropriate manner and deliver them back to the students before the due date of the assignment so that the students could timely submit this, and can score higher marks. The experts of the assignment help services at www.assignmenthippo.com are so much skilled, capable, talented, and experienced in their field and use our best and free Citation Generator and cite your writing assignments, so, for this, they can effectively write the best economics assignment help services.

Get Online Support for Navarro Steel: All About Cost Assessment Answer Assignment Help Online

Want to order fresh copy of the Sample Navarro Steel: All About Cost Assessment Answers? online or do you need the old solutions for Sample Navarro Steel: All About Cost Assessment Answer, contact our customer support or talk to us to get the answers of it.

Assignment Help Australia
Want latest solution of this assignment

Want to order fresh copy of the Navarro Steel: All About Cost Assessment Answers? online or do you need the old solutions for Sample Navarro Steel: All About Cost Assessment Answer, contact our customer support or talk to us to get the answers of it.


Submit Your Assignment Here

AssignmentHippo Features

On Time Delivery

Our motto is deliver assignment on Time. Our Expert writers deliver quality assignments to the students.

Plagiarism Free Work

Get reliable and unique assignments by using our 100% plagiarism-free.

24 X 7 Live Help

Get connected 24*7 with our Live Chat support executives to receive instant solutions for your assignment.

Services For All Subjects

Get Help with all the subjects like: Programming, Accounting, Finance, Engineering, Law and Marketing.

Best Price Guarantee

Get premium service at a pocket-friendly rate at AssignmentHippo

FREE RESOURCES

  • Assignment Writing Guide
  • Essay Writing Guide
  • Dissertation Writing Guide
  • Research Paper Writing Guide

FREE SAMPLE FILE

  • Accounts
  • Computer Science
  • Economics
  • Engineering

Client Review

I was struggling so hard to complete my marketing assignment on brand development when I decided to finally reach to the experts of this portal. They certainly deliver perfect consistency and the desired format. The content prepared by the experts of this platform was simply amazing. I definitely owe my grades to them.

Tap to Chat
Get instant assignment help