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ACCT6006 Costing for Small Business Assignment Sample MTU Ireland

ACCT6006 Costing for Small Business is an excellent course that provides students with the necessary skills and knowledge to cost products and services for small businesses. The course covers a wide range of costing methods, including job-order costing, process costing, and activity-based costing.

Students will learn how to apply these methods to real-world scenarios, and will also gain an understanding of the principles behind cost allocation and pricing. This knowledge is essential for anyone who wants to start or manage a small business.

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In this section, we are describing some assigned activities. These are:

Assignment Activity 1: Evaluate the fixed and variable costs of a business.

There are both fixed and variable costs associated with any business. Fixed costs are those costs that do not change regardless of the level of production, while variable costs are those that change in direct proportion to the level of production.

Some common fixed costs include rent, insurance, and licensing fees. Common variable costs include raw materials, wages, and commissions. Businesses need to track both fixed and variable costs to make informed decisions about pricing and production levels.

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Assignment Activity 2: Complete a valuation and account for stock.

There are a few key things you need to do to complete a stock valuation. First, you need to gather information about the company, including its financial history and current economic conditions. Second, you need to select a valuation method. The most common methods are the discounted cash flow method and the relative valuation method. Third, you need to inputs your chosen method and calculate the value of the stock.

Once you’ve done all of that, you need to account for any risks associated with owning the stock. This includes things like business risk, macroeconomic risk, and political risk. You also need to identify any potential catalysts that could increase or decrease the value of the stock. Finally, you need to come up with a target price for the stock.

This is just a brief overview of how to complete a stock valuation. For more information, please consult a financial advisor or investment professional.

Assignment Activity 3: Apply the concepts of budgeting in Cost Accounting.

When creating or analyzing a budget, cost accountants take into consideration the following concepts:

Fixed Costs: Fixed costs are those that do not change the amount of product or services produced. For example, rent and utilities are usually fixed costs.

Variable Costs: Variable costs are those that vary in the amount of product or services produced. For example, the cost of raw materials is variable.

Total Cost: The total cost is the sum of all fixed and variable costs.

Unit Cost: The unit cost is the cost per unit of output. It is calculated by dividing total costs by the number of units produced.

Cost Driver: A cost driver is an activity that causes costs to increase or decrease. For example, the number of employees is a cost driver for payroll expenses.

Budget: A budget is a plan that details how resources will be used over some time. It is important to note that budgets are not static; they can and should be revised as conditions change.

Creating a budget is an important part of cost accounting. It allows businesses to track their costs and make informed decisions about where to allocate their resources. If you are considering creating a budget for your business, please consult a professional accountant or financial advisor.

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Assignment Activity 4: Manage a business’s working capital.

There are a few key things to keep in mind when managing a business’s working capital. First, you need to have a clear understanding of what working capital is. Working capital is the money that a business has available to cover day-to-day expenses and short-term debts. It’s important to maintain a healthy level of working capital, as it can help a business stay afloat during tough times.

There are a few different ways to manage working capital. One way is to offer early payment discounts to customers who pay their invoices within a certain timeframe. This can help free up cash flow and reduce pressure on the company’s finances. Another way to manage working capital is through credit control measures such as setting credit limits and monitoring customer payment history. Finally, businesses can also invest their excess working capital in short-term investments such as treasury bills or money market funds.

For more information on managing working capital, please consult a financial advisor or accountant.

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