OBU RAP Topic 10

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

“The improved knowledge of the different Cost Accounting techniques along with the proper application of all the gathered information (via primary sources of information from the selected company) and the guidance of a highly qualified mentor are the keys for successful passing of the RAP”


Cost Accounting is a type of accounting process that is set on capturing the company’s costs of production by assessment of the input costs of each step of the production and the fixed costs like the depreciation of the capital equipment. The cost accounting will firstly measure and record these costs separately and then compare the input and output results to help the organization management in the measuring of the financial performance. Cost Accounting can be a very beneficial tool for managing the budgeting and the setting up of cost control programs which can improve the net margins for the company.

Cost Accounting is used to calculate the unit cost of a manufacturer’s product in order to report the cost of inventory on the balance sheet and the cost of the sold goods on the income statement. This is done via several techniques like the allocation of manufacturing overhead funds and by using the process costing, operations costing and job-order costing systems.

The costing techniques like the Marginal, Absorption and Standard costing assist the management of the company by providing an analysis of the behaviour, the cost-volume-profit relationship, the operational and capital budgeting, the standard costing, the variance analysis of costs and revenue, the transfer pricing, the activity-based costs and more.

The Cost Accounting finds its beginnings in the manufacturing businesses and today it even extends to the service businesses. As an example, a bank uses costing techniques to determine the cost of processing a check or a deposit. This provides the management with insight into the pricing of these services.

An aspect that should be carefully considered by the student for the needs of this topic is their understanding of the overall cost accounting along with the various techniques. The students will need to evaluate the information gotten by the management of the selected company in terms of various cost accounting techniques and describe the effectiveness of using these techniques for the management of the company in getting the maximal benefits in the general decision making, or they are only used without consideration of the main aspects of the cost accounting techniques.

Key features/requirements

  • An adequate explanation of the general concept of Costing Techniques in a general (Literary terms) and in a specific manner to the selected company;
  • An assessment of the impact the Costing Techniques have on the general business performance of the organization;
  • Giving a qualitative and quantitative analysis in proper support of the mentioned aspects;
  • Maintaining a good balance when explaining and analyzing the different aspects of the effectiveness of the use of the Costing Techniques in a company.

Key Success Factors

  • The proper application of the selected goals and objectives set up in the beginning of the RAP in the appropriate sections of the RAP;
  • Adequate answers to the research questions set up at the beginning of the RAP in their appropriate sections;
  • Using the right research methodology to achieve good results on the set goals and objectives for the RAP;
  • Maintain a logical flow of the discussion by considering the prescribed requirements of the topic;
  • Give a logical conclusion on the work at the end of the Research Report by having in consideration all the requirements of the topic.

Major benefits of choosing this topic

  • The student can use the acquired knowledge in a practical situation;
  • The different techniques learnt here will be of great help in the professional career of the student.

Major possible limitations faced by student under this topic

  • The student may not be welcomed by the management of the selected company and may not be provided with the information necessary for this topic due to reasons like confidentiality or legal issues or unavailability of authorized personnel;
  • The student may not be able to procure proper information from reliable secondary sources of information and may lack good ideas for improvement of the project;
  • The lack of professional experience of the student may be shown during the assessment of the performance management related to the budget control system of the selected organization;
  • The student may face confusion between the variations of the actual information from the primary sources of information and the results from information from secondary sources.

Suitable organisation under this topic

A suitable company for the preparation of the RAP on Topic 10 is the company for which the student can get access to the management of the company and the management is willing to provide the required information. The selection of an adequate company is essential to creating a good RAP, as the student needs to know and understand the general operations of the company and its associated sector. Based on the knowledge of the company and sector, the student can make the connections to the various aspects of the operations of the selected company with the requirements of the topic and will be able to prepare a good quality RAP and get good grades.

When making a decision for a company for their RAP, the student will need to follow these aspects:

  • The personal interest to the general business of the selected company is necessary for topic 10;
  • Access to primary sources of information is essential for the adequate preparation of Topic 10;
  • Access to proper information from secondary sources;
  • Understanding the general operation of the selected company is also necessary for Topic 10;
  • Familiarity with the sector related to the selected company;
  • Access to important official representatives from the selected company is important for Topic 10;
  • Understanding the prescribed requirement for Topic 10 and their proper application in the selected organization from the beginning of the RAP.

Suggested approach for this topic

If the student chooses Topic 10 then a proper plan must be set from the beginning so the student can conduct all the necessary tasks in a proper and timely manner. The student will need to have an good understanding of the major requirements of this topic and will need to carefully evaluate the required aspects by establishing a detailed strategy of research. The student will need to evaluate the necessary processes that they will have to follow in order to meet all the necessary requirements, something that is possible by a careful planning at the beginning of the RAP.

The student will have to prepare a logical table of contents of their RAP under topic 10 so that it covers all the tasks that the student needs to complete. The prepared table of contents will enable the student to stay on the proper course from the beginning, and the student can estimate the time needed for completing the various tasks required for a proper and timely completion of the RAP.

After creating the table of content for the RAP under Topic 10, the student will need to start gathering the necessary information according to the topic requirements. The student will need to analyze all the gathered information by consultation with their Project Mentor. The feedback from the Project Mentor is very important for the proper completion of the RAP, so the student needs to share their plans with their Project Mentor so they can get the proper guidance in an effective manner.

As there is not a standard approach for completing the RAP under topic 10 and we have outlined a broad level approach here. The detailed approach depends on to the plans of the student and the available information on the selected company. Whichever approach is taken by the student, the guidance from the Project Mentor at every step of the way is important for meeting all the prescribed information of this topic and get good grades on their RAP.

Availability of Information

The RAP needs to be completed on the provided information directly from the management of the selected organization as the primary source of information, along with information from the various other relevant secondary sources of information like online sources, newspapers, journals, books, archives, etc. The availability of information from the primary source is necessary as Topic 10 cannot be completed without the obtaining of specific information on the selected organization. The student needs to make sure that they have access to detailed information by the management of the selected company and there are no confidentiality or legal issues related to this.

The student needs to consider the selection of topic 10 for their RAP, as the requirements of this topic are only satisfied if the student has access to enough relevant information on the selected company. If there are any issues in acquiring the required information during the research stage of the RAP, the student should consider selecting a different topic, as the inadequate information can bring a low-quality RAP with low grades or failing the RAP.

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