Accounting for a Cabinet Division

Accounting for a Cabinet Division

You have been hired as a managerial accountant by Mr. Smith of Wilson-West Manufacturing, a start-up company that produces several different product lines. He would like you to set up the cost accounting system for the cabinet division. Listed below are your new job requirements and at least 1 task for each.

Compile a document or 400–600 words with the following requirements:

• Types of costs
  • Explain what types of costs you plan on using to distinguish the different types of cabinets that will be produced.
    • Examples should include direct costs items, indirect costs items, as well as variable costing.
  • What are at least 5 types of expenses that are associated with manufacturing the cabinets?
• Cost accounting methods
  • Explain how product costing is used for a cabinet division.
  • Give 2 examples of how you will use product costing.
  • Which costing method will you use for the cabinet division: Activity-based costing (ABC), job order costing, or process costing?
  • Validate your answer with 2–3 reasons for and 2–3 reasons against the other types of costing.

Minimum 2 references with in-text citations must be used. Websites need to be g

Answer Preview

For a firm to have accurate decision making, there is need for the accounting records to be equality accurate. In the above case, there are several types of costs that would use to differentiate the costs of the different cabinets made. The first would be the direct costs involved and this I would look at the cost of the materials such as paint and wood used in making the…

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