Job order and process cost system job order cost system involves batch-wise or job-wise accumulation of costs. On the other hand, process costing involves assigning costs to both partially and fully completed products. Consider the features of job order costing and process costing and respond to the following: what are the factors that a company must consider while deciding whether to use a job order or a process cost system? What might be the consequences of selecting the wrong costing system? Cost-volume-profit the CVP income statement may be very useful for decision making. In this context, respond to the following: what are the features of a CVP income statement that make it more useful for management decision making than the traditional income statement prepared for external users? Direct labor as an overhead allocation basis identifies the usefulness of direct labor a basis for allocating overheads to products. Analyze the decrease in usefulness of direct labor as the primary basis for allocating overheads to products. Direct labor cost is usually taken as the basis of allocation of manufacturing overheads to products. Keeping this in mind, respond to the following: what are the benefits of using direct labor as an overhead allocation basis? How has the usefulness of direct labor, as the primary basis for allocating overheads to products, been reduced in recent industrial history? Importance of cost behavior analysis identifies the importance of cost behavior analysis to the management of an organization. Analysis of cost behavior provides a way of determining how a specific cost will increase or decrease, based on changes in the activity levels. In this context, respond to the following: How is cost behavior analysis important to the management of an organization? Budgeting identify the advantages of budgeting. Identify the contribution of budgeting to good management in an organization. Identify the situations in which the budgeting process can be a hindrance to an organization. Budgeting is a managerial tool used for financial planning and control. Consider the features of budgeting and respond to the following: what are the primary advantages of budgeting? Provide an example. When can the budgeting process be a hindrance to an organization? Explain by giving some examples. Flexible budget identify the characteristics of flexible and static budgets. A flexible budget adjusts revenues and costs with changes in the levels of activity. It is a performance evaluation tool for different levels of activity. Consider the features of a flexible budget and respond to the following: do you agree that a flexible budget is actually a series of static budgets? Explain. Financial performance metrics compare economic value added and return on investment and residual income as financial performance metrics. Companies use different metrics, such as return on investment (ROI) and economic value added (EVA), to measuring their financial performance. Consider the features of these metrics and respond to the following: How does EVA compare to ROI and residual income in measuring the financial performance of a company? Is EVA superior to ROI? Explain. Discontinued product lines explain the reasons for dropping a product line which is generating a loss. The CPA for Hollister corporation said to its president, “if a product line is generating a loss, then it should be discontinued.” What are your thoughts on the statement? Labor rate variance explains and applies the concept of labor rate variance. Labor rate variance is the difference between the actual labor rate and the applied overhead rate (standard rate multiplied by the number of actual hours worked). Consider this and respond to the following: "our workers are all under labor contracts. Therefore, our labor rate variance is bound to be zero." do you agree or disagree that the labor rate variance will be zero if all workers are under labor contracts? Explain giving reasons. Direct labor variance identifies the effect of poor quality materials on direct labor variance. Identify the risks associated with direct labor variance. Direct labor variance is the difference between the standard cost and the actual cost of production. Considering this, answer the questions that follow: what effect, if any, would you expect poor quality materials to have on direct labor variances? How must a company plan to mitigate the risks associated with direct labor variances? Payback and simple rate of return identify the features of the payback and simple rate of return methods. Explain the major criticisms of the payback and simple rate of return methods in making capital budgeting decisions. Identify the efficacy of the payback and simple rate of return methods. Payback and rate of return are financial tools used in capital budgeting to decide the viability of investments over a period of time.