OBU RAP Topic 10


A review of the effectiveness of the use of costing techniques within an organisation

cost accounting techniques

 

“Better knowledge of various Cost Accounting techniques along with its proper application on all gathered information (through primary sources of selected organisation) under well qualified mentor is key to success for passing RAP under this topic”

Overview

Cost Accounting is a type of accounting process that aims to capture a organisation’s costs of production by assessing the input costs of each step of production as well as fixed costs such as depreciation of capital equipment. Cost accounting will first measure and record these costs individually, then compare input results to output or actual results to aid organisation management in measuring financial performance.  Cost accounting can be most beneficial as a tool for management in budgeting and in setting up cost control programs, which can improve net margins for the organisation in the future.

(Source: Investopdia.com)

Cost accounting is used to compute the unit cost of a manufacturer’s products in order to report the cost of inventory on its balance sheet and the cost of goods sold on its income statement. This is achieved with techniques such as the allocation of manufacturing overhead costs and through the use of process costing, operations costing, and job-order costing systems.

Costing techniques like Marginal, Absorption and Standard costing assists management by providing analysis of cost behavior, cost-volume-profit relationships, operational and capital budgeting, standard costing, variance analyses for costs and revenues, transfer pricing, activity-based costing, and more.

Cost accounting had its roots in manufacturing businesses, but today it extends to service businesses as well. For example, a bank will use costing techniques to determine the cost of processing a customer’s check and/or a deposit. This in turn may provide  management with guidance in the pricing of these services.

An important aspect that student should consider under this topic is that he/she must have better understanding of overall cost accounting along with its various techniques. Students need to evaluate information provided by management of selected organisation in the light of various cost accounting techniques and then describe effectiveness of usage of these techniques as whether management of the organisation are getting maximum benefits from these cost accounting techniques in overall decision making or just use without considering key aspects of cost accounting techniques.

Key features / requirements

  • Proper explanation of overall concept of Costing Techniques both in general (i.e. Litterateur Review) and specific to the selected organisation.
  • Assessment of how different Costing Techniques impact on overall business performance of the organisation.
  • Provide some quantitative and qualitative analysis to substantiate above mentioned aspects in proper manner.
  • Maintain proper balance in explanation / analysis of different aspects of effectiveness of the use of costing techniques within an organisation.

*Feedback from project mentor is essential to get good grades in RAP.

Key Success Factors

  • Proper application of all selected aims and objectives (that decided in inception of RAP) in appropriate sections of RAP.
  • Proper answering of all research questions (that decided in inception of RAP) in appropriate sections of RAP.
  • Usage of proper research methodology to achieve good result against all selected aims and objectives (that decided in inception of RAP).
  • Maintain proper sequence of all discussion in logical manner by keeping all requirements of the topic.
  • Logically conclude all performed work at the end of Research Report by keeping in consideration of all requirements of the topic.

*Feedback from project mentor is essential to get good grades in RAP.

Major benefits for choosing this topic

  • Student will practically apply his/her bookish knowledge into real life.
  • Various techniques learned under this topic will substantially help student in his/her professional life.

Major possible limitations faced by student under this topic

  • Students may not entertain well by the management of selected organisation in provision of required information due to various issues (e.g. confidentiality aspects, non availability of authorized person to disseminate information to student for research work, etc.)
  • Student may not find good stuff from internet  or other sources (due to weak research approach) to bring ideas for improvement in the project.
  • Performance management in respect of budget control system of selected organisation may not critically assess by the student due to lack of professional experience.
  • Student may be confused due to variation in actual information (verbal or documented) provided from primary sources with the result that he/she actually derive from his/her research work as per requirement of the topic.

*Feedback from project mentor is essential to get good grades in RAP.

Suitable organisation under this topic

The most suitable organisation under this topic is that for which student have access to management of the company and moreover management of the company is willingly provide all required information to student as required under the topic. Selection of most appropriate organisation is very essential as student must have better understanding of overall operations of the organisation and moreover he/she also have enough knowledge of the sector in which his/her selected organisation actually operates. Based on better knowledge of the organisation and respective sector , student will be able to interlink various aspect of overall operations of the selected organisation with all requirements of the topic that ultimately help him/her in getting good grades.

In short student need to assess following aspects in selection of organisation for RAP.

  • Student’s own interest related to overall business of the organisation;
  • Accessibility of information from primary sources (extremely important in topic 10);
  • Accessibility of information from secondary sources;
  • Knowledge of overall operations of the organisation (extremely important in topic 10);
  • Knowledge of overall associated sector of the organisation;
  • Availability of time from concerned officials of selected organisation (extremely important in topic 10);
  • Basic idea of requirements of selected topic and their applications on proposed organisation in inception of RAP.

*Feedback from project mentor is essential to get good grades in RAP.

Suggested approach for this topic

Under this topic, student must plan properly from inception so that he/she can complete all tasks effectively in proper manners. First of all, student must  gain excellent understanding of major requirements of this topic and he/she need to critically assess all aspects of requirement by defining detailed strategy.  Student need to assess that what process that he/she actually follow to meet all requirements that only possible through detailed planning in inception of RAP.

Student need to  prepare overall content of RAP under topic 10 that describes logical sequence of all tasks that need to adhere by the student. This content will also help student to keep on right track from inception and at the same time student can also assess time factor against planned vs. actual tasks through considering his allocated time for complete preparation of RAP.

After finalization of overall content of RAP under topic 10, student need to start working logically from gathering of information as per requirement of topic. Student need to assess all gathered information very critically through consultation from mentor. Mentor feedback on key areas of RAP is very essential so student should share his/her thoughts with project mentor regularly to get efficient guidance in time accordingly.

In short, there is no 100% suggested approach for topic 10 as keeping broader level approach (described above) , detailed approach under topic 10 varies due to student’s perception that he conceived from requirements of the topic along with available information of selected organisation. Whatever, the approach you will follow , keep getting guidance from project mentor at every step so that you can meet all requirements of topic and get good grades.

*Feedback from project mentor is essential to get good grades in RAP.

Availability of Information

Student have to complete his/her RAP based on provision of information directly from management of the organisation (i.e. primary sources of information) along with vast information available through different mediums (internet, newspaper, books, etc.) under secondary sources of information.  Availability of information from primary sources under topic number 10 is very essential as this topic cannot complete at all without getting specific information of the selected organisation. Student need to ensure that he has access of vast information from management of the selected organisation and there is no confidentiality concerns by them as well.

In short, student need to assess very critically before opting this topic for RAP as all requirements of this topic only meet if student have enough information about selected organisation. If there is any doubt on provision of required information during perpetration of RAP then student should not select this topic for RAP as it impact on overall evaluation of information and overall grades of RAP.

*Feedback from project mentor is essential to get good grades in RAP.

Important Links

Business Analysis Section of RAP

Reference Generator Link

Others

 

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