Engineering business functions Assignment Example | Topics and Well Written Essays - 750 words

Engineering business functions - Assignment Example For instance, the purchases Department are directly linked to the plant processing company. It is the purchases department that works towards ensuring that the raw materials are available for processing in the plant. The purchased parts of the automobiles are processed to form the end products that are sold. Again, where there is a delay in the purchases, the output will reduce. At the same time, when there is a problem with the finance department, there will be reduced efficiency in the purchasing department that will eventually be reflected in the output in the organization. However, efficiency in the finance department will also lead to efficiency in other operations given other factors are always kept constant. Additionally, the production process relies heavily on other important factors. For instance, for effective production, the mechanical processes involved must all be efficient. The required expertise must always be availed to monitor the whole task otherwise that will occu r some errors. Moreover, if the sales department does not effectively execute their duties, then there will be overstocking that will otherwise result in losses in the organization and reduce the rate of production. The necessity of developing standards is essential. The success of any business lies in achieving the standard that can suit both the customer’s specifications and that of the company. However, determining these specific standards remains the main problem that any firm can ever meet.

Management Accounting Essay Example | Topics and Well Written Essays - 1500 words - 5

Management Accounting - Essay Example The method emphasizes on the total costs incurred and the cost volume profits of the relationship are not considered. As far as the decision provided by the accountant, it is solely based on absorption costing. It is imperative to note that a major part of the costs of the two products are due to fixed overheads and administrative expenses. Moreover, these expenses are incurred even if the production of these two products is dropped. Hence a better costing method has to be adopted to effectively allocate the overheads. The two methods suited for Rothfield Plc are activity based costing and marginal costing. Activity Based Costing: ABC is a modern accounting system in which the expenses and overheads are segregated based on the functions of the organisation, which is followed by allocation of the costs to each of the items in respect to the volume of the activity (Kaplan & Anderson, 2007). The use of ABC costing allows the company to accurately assign the costs for all the activities of each of the product or service (Drury, 2005). Rothfield Plc can allocate the fixed overheads based on the usage of these resources by the various production processes. Marginal Costing or Variable Costing: Marginal Costing provides a clear explanation of the impact of changes in volume of output on the profits and the changes on the profits. There is also a clear differentiation between the fixed and variable costs as well. As explained by Dyson (2007), the fixed costs are never charged to the production and instead the fixed costs are treated as period charges. Hence Rothfield Plc can adopt this method to estimate the potential profits effectively. The total labor hours required to meet the estimated production levels are slightly higher (by 333 hours). Hence, it is evident that some of level of production of either one or some of the products has to be reduced. It is essential that whatever the production combination, the contributions from the sales are significant