Week 5 discussion questions and participation Essay

Week 5 discussion questions and participation - Essay ExampleThe trail method ignores any(prenominal) other service departments when allocating service speak to to production departments. The step down method is different because it recognizes that in some service departments support the activities in other service departments as well as the producing department. The direct method is simpler for accountants to calculate the costs since there are less variables involved. The step down method uses a sequence of service department allocation to arrive at the different costs.In the business domain of a function accountants prepare information differently depending on the purpose. Managerial accounting focuses on providing information for internal purposes. fiscal accounting on the other hand focuses in reservation reports for external users of information. Variable cost placement monitors changes in costs that occurred on a daily basis. This helps managers in their day to day decis ion making process. Data and information that is presented to outside users must summarize the results of a period of time. External users are non concerned about the day to day operations of the enterprise.Cost distortions are a potential conundrum that can lead to many obstacles for a manager. If the costing system of rules is not accurate the managers will view erroneous assumptions that can lead to business errors. For example imagine if a company had a costing system that stated that each unit cost $2.00 to produce. The costing system was distorted and the real cost of the product is $3.05. The made a decision to sell the product at $3.00 which a price that is 50% above cost based on the inaccurate costing system. The manager would lose $0.05 on all(prenominal) sale instead of making a $1.00 profit.If the company is able to develop a costing system that provides a lot of detail the decision seems like a good idea. The manager of that company has to construe if the benefit s of maintaining the system outweigh the costs of