Walden WMBA6681 Week 3 Assignment

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Walden WMBA6681 Week 3 Assignment

WEEK 3 ASSIGNMENT

In this week’s Discussion, you differentiated between
different costs and analyzed their relationships. For this week’s Assignment,
you evaluate a scenario in which standard cost systems are in use by using
direct labor and the materials’ variances calculations.

Imagine meeting David Baker, the owner of a T-shirt
manufacturer, whose business produces T-shirts for local businesses and
organizations where you live. David wants his business to grow considerably,
though he knows that with growth comes many different costs, including
increased labor costs, material costs, and maintenance on his building. He
needs to know if there are ways he can continue to grow his company while
cutting costs in the process. David knows that there are four main costs to
consider (product costs, direct material cost, direct labor cost, and
manufacturing overhead), and he knows that he must also consider his costs over
time. But he is not sure if all of these costs are equally important, or if he
should prioritize some costs over others. David has come to you for advice on
how to facilitate the optimal growth of his company.

To prepare for this Assignment, consider how the
classification of manufacturing costs will provide David with a better
understanding of the current state of his business, and how it can inform
effective financial decision making.

Using the Week 3 Assignment template, categorize each of the
following Cost Varieties by placing them within the Product Cost or Period Cost
column/system.

Cost Variety Product Cost Period Cost
·
Advertising expenses for T-shirts 

·
Depreciation on PCs in marketing department

·
Fire insurance on corporate headquarters

·
Fire insurance on plant

·
Overtime premium paid assembly workers

·
Factory building maintenance department

·
Factory security guards

·
Property taxes paid on corporate headquarters

·
Salaries of public relations staff

·
Salary of corporate controller

·
Wages of engineers in quality control

·
Wages paid to assembly-line employees

·
Wages paid to employees in finished goods warehouse

Once you have divided the Cost Varieties between the Product
Cost and Period Cost systems, identify each product cost within the following
appropriate sections: Direct Materials, Direct Labor, or Manufacturing
Overhead.

Product Cost Direct Materials Direct Labor Manufacturing Overhead
· · · ·

Finally, in a 1- to 2-page paper, provide at least two
recommendations for which types of costs David should pay the most attention to
in order to reduce costs. Include a rationale for each recommendation.

Note: In preparing your final submission, be sure to include
your Week 3 Assignment template with completed charts and your written
explanations with your 1- to 2-page document submission.

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