Accounting management help on: Essay writing on Cost & Resources

Essay 1The cost of the service and the product is considered as the amount that the organization spends for producing it. Cost referred as summation of variable and fixed expenses for manufacturing service or product. The main objective of the business is to produce a profit. It is very clear that knowing the cost of the services and products the organization supplies is fundamental for the effective management of the organization (Hope & Fraser, 2003).  The cost of the service or product fulfills some level which will cover the company cost of delivering and producing its offering. The price which the company chooses for its services and products shall change accordingly to its long period strategy of the marketing. In simple words, pricing is implemented as the tool for achieving complete goals of the marketing.

It has been examined that small businesses are not able to do so, because small business don’t know how to cost their services and products. Pricing considered as the vital component in accomplishing the profit that all companies may control. The actual cost of the service or product is comprised of 2 parts such as indirect and direct costs (Young, 2003).  When doing finding of the cost, the product and service being evaluated and should be clearly defined and identified with the designated result which shows the objectives, mission and goal to which the product associates (Smith, 2007).  For each service and product, both indirect and direct cost should be searched. Direct costs comprise personnel recruited for new supplies and designated products whereas indirect costs may sometimes be complex for apportionment and show what may otherwise seemed as the operational expenses. Before setting of the prices, the manufacturer needs to understand the market of the product, costs, distribution and competition.  The place of the market reacts quickly to international competition and technological advances. In general, policy and pricing structure are major elements of the public image and are vital to keeping and securing the clientele.It has been examined that pricing for the service business might be more difficult as compared to retail pricing. However, the outcome is similar, desired profit, operating expenses and cost equals the price of the service (Jeffreys, 2011).  The foundation to the success depends upon the well planned policies. The companies should form policies and monitor operating costs and prices for ensuring a profit. Pricing must be in accordance with the excellence of advantages which the business offers for its users, whereas bearing in the mind about the prices that the competitors charge. For maximize the profitability, what advantages that the customers have by using the service or product. In general, user perceives the product value and finds out the maximum price users shall pay. Perceived excellence is formed by the marketing messages, established reputation, sales environments and packaging. The significant element of the perceived value is evaluation among prospects and customers. For example cost plus pricing takes into consideration the cost of manufacturing service or product which adds the amount and required to create the profit. It is usually suited to the business which transacts with high volumes and work in markets which is dominated by the competition on the price. It is viewed that owner operators never properly recognize the producing costs what they actually sell. This kind of misunderstanding creates lower profits and poor decisions (Drucy, 2004). It becomes significant for the process of the management to review the methods of the costing periodically.  In general, most of the business owners shall know the entire cost of services and products but they don’t know the cost of each and every individual item (Andrews, 2004).   Yet, decisions of the costing may have significant impacts for marketing organization and attention offered by marketer for pricing and considered as the significant attention for more recognizable activities of the marketing (Partnerships Victoria, 2001).  Lastly it can be said that knowledge of the cost of services and products supplied informs management decision making throughout the organization, because knowing cost of services and products gives the idea about the expenditures incurred on manufacturing of products and services and inform the consumers about the cost structure of the product. In general, cost is the element which persuades the consumer to buy the product or not. Cost is decided by the management of the organization by taking into consideration all factors like competitors, margin and profit, distribution and competition.

Essay 2In general, budget considered as the comprehensive and formal plan which estimates the possible income and expenditures for the organization throughout a particular period. Yes, it is true it is easy to budget but it is more difficult to budget effectively. In general, budgeting explains the entire process of using and preparing the budget (Andrews, 2004).  Normally, budgets are referred as valuable tools for control and planning of finances, budgeting impacts almost each kind of the organization-from large companies and governments to the small business and individuals and families. The small business normally indulges in the budgeting for finding out the most effective strategies for creating money and diversifying its base of the asset. Budgeting may assist the company to use its limited human and financial resources in the path that exploit current opportunities of the business. The process of the budget is chronological in nature for e.g. each budget depends upon the earlier budget, so no any budget could be formed without data from previous budget. Budgets might be widely categorized according to how the company uses and makes its money. Distinct budgets might be implemented for various applications. Few budgets transact with income sources from interest, income from dividend, sales and another sources. Extra kinds of budgets are worried with spending funds for the capital expenditure like property, plant and equipment and few budgets estimate the sums of funds the organization shall have at the year –end.

The systems of the Budgeting serve numerous purposes with control and planning being two of significant functions. The authors reveal that it is on the management to choose which function must be more sufficient for the enterprise. For e.g. the authors claim that the greater firms must concentrate on coordination and control aspects of the budgeting, while small companies must be more focused with the aspects of the planning. Planning involves making objectives for enterprise and while control involves the accomplishment of the goals.  Small business which operates in competitive and uncertain environments is required to control and plan the operations because this shall assist managers to conduct the business successfully. Budgeting might be costly and time consuming for the small business but it can offer a numerous benefits, comprising the enhanced costs awareness and coordination efforts regarding the goals of the Company, enhanced communication and the background for the evaluation of the performance.

The factors that managers should take into account to help ensure that the budgeting system assists an organization achieve its objectives. To become successful, budgets must be formed in relation with the subsequent principles:

Quantifiable and Realistic: In the world of restricted sources, the company should apportion its own inputs and resources by forming objectives and goals that are sound attainable. Realism engenders commitment and loyalty between workers and encouraging them to their greatest performance. In summation, broad discrepancies impacted by the non-realistic projections and have negative consequence on company credit worthiness and might dissuade the lenders. The company analyzes every possible activity to find out those which shall result in most adequate allocation of the resource. The company achieves this with the help of costs quantification and advantages of activities.

Historical:  The budget shows an apparent understanding of previous outcomes and sense of estimated future alterations. Whereas, previous outcomes might not be the perfect estimator and they flag significant benchmarks and events.

Period Budget: The period of the budget should be of logical length. The smaller the period, greater will be the requirement for control and detail mechanisms (Hope & Fraser, 2003).  The duration of period of the budget determines the times restrictions for initiating efficient changes.  Though, projects and plans distinct in scope and length and the company estimates its budgets on the basis of 12-month.

Standardized Managers should use standardized formulas and techniques of the research for facilitating the process of the budget.  This enhances the consistency and efficiency of the quality and input of planning. Computer-related accounting, reporting and analyzing not only provide managers with complete and real time results but also provides flexibility for testing of innovative models and comprises high-powered and relevant tables and chart with significantly small effort.

Inclusive:  Efficient organizations decentralize the process of the budget down to smallest relevant stage of the responsibility. Those who are accountable for the outcomes may take initiative in formation of budgets and learn how activities are associated with other divisions of the organization. Participants from several segments meet for exchanging objectives and ideas, for discovering innovative ideas and to reduce counterproductive programs and redundancies. In this path, those who are accountable work harder and have more capability for the success. Successively Reviewed Decentralization doesn’t prohibit the evaluation of the budget proposal at the successive levels of the management.Formally disseminated and adopted: In, fact top management accepts the budgets and shares their actions to responsible personnel. The management has formed the budget and dispersed it in the proper manner.

 Frequently Evaluated: In, fact parties may use the budgets and their budgets of the department for guidance and information. On the daily basis, as per the schedule and in standardized method, they evaluate real results with its budgets. For the yearly budget, managers generally report quarterly, half yearly and yearly (Bogsnes, 2009).  The accountant performs the crucial function in reporting function. The Company implements well-designed program of the budget as the efficient procedure for predicting actual results throughout the particular period, coordinating and planning its several operations and monitoring the usage of budget plans.

To do this efficiently, the company takes the process of the budgeting for evaluating the opportunities of the business accessible to it. The Company should plan long term strategy that explains its entire effort in creation of market share, enhancing revenues and minimizing costs. The Company should also plan short term strategy for enhancing the profits, controlling of costs and mechanisms of the control for creating modifications in strategies whenever it is necessary.

At last, it can be said that the budgeting considered as the process of controlling and planning for the assets utilization in activities of the business. It is referred as the comprehensive and formal process that gives detail of operations, finance and sales and hence offering management with the guidelines of the performance (Young, 2003). With the help of budgeting, management finds out the profitable implementation of the restricted resources. It is very clear that process of the budgeting enhances ability of the management to efficiently deploy the resources and initiate alterations to plan in the timely manner.

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