6 pages n/b
As an EEC corporate business financial analyst, you must have an expert understanding of the various costing methods. Within your groups, divide the costing concepts among the individual team members to analyze and become an expert in at least 1 costing concept within your group. Then, write a paper to include the following:
• How the concept could be used by EEC
• When the concept could be used by EEC
• How the application of the concept differs from the other concepts
• Advantages and disadvantages of the concept as it relates to EEC
Choose from the following costing concepts: I choose ( Full costing/absorption costing )
Research Ethan Allen’s manufacturing production:
• Should Ethan Allen use a job-order costing system, which is a costing system where costs are collected and assigned to units of production for each individual job, or a process costing system, which is a costing system that accumulates production costs by process or department for a given period of time, to report costs?
o How are the systems different?
• Describe how the selected system would work to track the / the product.
• Identify the cost driver, and explain the process of tracking the costs.
• Provide examples of products that Ethan Allen might offer for which a job-order costing system would be appropriate (you may make up products for this assignment).
• Provide examples of products that Ethan Allen might offer for which a process costing system would be appropriate (you may make up products for this assignment).
Phase 2 Group Project Assignment Hints
Define each of the costing concepts and explain how Ethan Allen may benefit from using each. The group should assemble this information into a presentation for management as a recommendation to use different costing methods for different disciplines/departments for different purposes.
Full costing/Absorption costing: This is used for product costing of sales and inventory. Required to be used for external financial reporting and tax reporting. It assigns all manufacturing cost to the product for accumulation in inventory until the product is sold. Ethan Allen is already using this model as required under United States GAAP.
