Question

Accounting 2: Cost terms, Cost Behavior, Cost Systems.

The assignment is to interview a manufacturing company: Example - tile, hardwood floor or other construction material OR other type of manufacturing company.

There needs to be a TOPIC OR 2.

Ex: it’s budgeting process.

One would also need to focus on a particular area(s) like their Acct. Process.

Ex: How they do their Accounting for inventory or how they do their budgeting.

What 2 topics and area would you focus on?

What 6 questions would you ask this company (using those topics and area)?

If there needs to be more details or information given, how do I add to this post??? Thx & please be detailed!!

Answer 1

Part 1)

The two topics and area I would focus on are given below:

1) The budgeting process.

2) Application of traditional costing of activity based costing.

_____

Part 2)

The following six questions would be asked by me regarding the topics/areas identified in Part 1):

1) What all budgets are prepared by the company (such as sales, purchases, cash budget and so on)?

2) What is the frequency of budget preparation (such as monthly, quarterly, semi-annually or annually)?

3) Are managers involved in the preparation of budget?

4) Are budgeted figures compared with actual results and how the variations (if any) are rectified?

5) Which method of costing - traditional (predetermined overhead rate) or activity based costing is used by the company to arrive at the cost of its products and why?

6) What is the costing method used by other companies operating in the same industry?