Reference no: EM132325290

Assignment: Compose your essay in MS Word. Your essay must include a cover page, introduction, body, conclusion, and a reference page. Be sure to address all relevant parts of each question. Your response should be a minimum of 950 words in length (not including the cover page and the reference page). Cite all references you use. Note: You must use at least six (6) references. Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number.

Suppose you are looking into to start a business and just learned all about the cost.

1. To learn more about cost you decided to select 2 (two) companies one that uses job order and another process costing. For each of the two types of companies you selected from above, provide an example of each of the following costs your selected companies might incur. Fully explain your examples.

• Direct material.

• Direct labor

• Manufacturing overhead

• Selling and administrative expense. Be sure to explain and support your answers.

2. Suppose you have decided to start a business producing and selling a product of your choice answer the following questions related to your product:

• Briefly describe the product you would produce and sell. What market will you target this product for? At what price would you sell your product? Make a projection of your sales in units for the first year of operations.

• Make a detailed list of the materials needed to make your product. (Use the textbook and/or outside research as necessary.) How much in materials will you need for the year? What is the cost of these materials?

• Make a list of expenses you would incur in your business venture. (Use the textbook and/or outside research as necessary.) Examples include rent, utilities, insurance, direct labor, manufacturing overhead costs and so on. Estimate the cost of each of these expenses per year.

• Classify all of your expenses as either fixed or variable, and calculate how many units of your product you would need to sell to break even. Show your work.

• How much operating income would you like to earn in the first year? Calculate how many units you would need to sell to break even, and to meet your target profit.

• How realistic is your potential venture? Do you think your target profit is achievable? Explain.

3. Using the textbook and/or the Internet, find resources that confirm the importance of budgeting to organizations and answer the questions below in essay format. Briefly describe your understanding of how and why managers use budgets.

• What types of budget approaches are typically used in for-profit companies as opposed to non-profit organizations? Explain at least two different budget methods.

• What type of budget will you use for your company?

• Describe a minimum of two ways in which a personal budget is similar to a business budget. Elaborate your response.