Reference no: EM133182905

Opinion 1

Several financial ratios, including - are utilized in decision-making. For instance, "liquidity ratios" are used when a company can pay its short-term commitments. In this case, total current assets and total current liabilities are used to assess the current ratio. A debt ratio sometimes refers to long-term debt relative to equity. These aid in reducing an organization's dependency on outside variables. Another would be to estimate sales and organizational profitability, which are calculated using the sales growth rate (SGR), gross margin sales, operational profit sales, and SGR, which provides insight into how the organization will expand in the future. The sustainable growth rate is assessed concerning dividend policy, leverage, asset efficiency, and profitability. Additionally, "inventory turnover," "days in inventory," "assets turnover," etc., are used to determine how the firm's assets would be assessed or how efficient they would be (Takon & Atseye, 2015).

The ABC Company, a business, purchased ten passenger buses with a root license that may be used to carry people from one spot to another at different locations around the nation. In this firm, operational management is done using the Six Sigma concept, and production management is done using other relevant elements efficiently. The basic idea is already aware of the material input. The manufacturing process includes several types of packaging, distribution, and online services, in addition to employing a variety of technological sciences and technologies. This operational management may be defined in terms of the many activities in that approach. For the administration of this bus transportation business, the numerous technical processes required for bus operations and varied routes across a nation are efficient. This bus is running in the designated specified groups per the schedule provided for every transport bus, so the appropriate ticket fee may be collected.

By applying efficient management of the inputs, such as human resources, bus drivers, and conductors, as well as all other inputs, such as early as auxiliary products, the net profit may be estimated after the ticket sales are subtracted. Every bus route in every mode of transportation. This bus firm uses efficient management technology, inputs, input utilization, and systems management to return significant profit-related aspects and acquire an advantage. The transportation business has grown to become a significant participant on the national stage. Thus, the origin of a company's production services and operational procedures may be discussed, as can how it began to make money using different strategies (Chan et al., 2005).

Without question, management and financial accounting are most concerned with ethics. However, there are particular moral concerns with the absorption costing technique. Although the absorption approach is moral since it is needed by GAAP (Generally Accepted Accounting Principles) for external reporting, it does include several ethically dubious flaws.

1. A misrepresentation of costs

In absorption costing, labor and raw material expenses are included together with all other costs (both fixed and variable) associated with producing an item.

2. Profit-Making Manipulation

When the absorption costing approach is used, it is simple to unethically alter the values of expenses and inventories to portray the company's performance more favorably than it did.

3. Excessive Asset Value

Under absorption, costs might cause the income statement to overstate the company's true asset worth. Therefore, it is simple to alter financial accounts by increasing the value of inventories.

4. Hiding poor performance

Opinion 2

Boot Barn Holdings Inc. (BOOT) trades in the SIC 5661- the shoe stores industry. The company's latest annual report was on 12/31/2021. Advanced financial statement analysis greatly influences management and external investors' decision-making. The important information the analysis provides includes the financial performance or position compared to the industry level. It is used to measure the efficiency of the management decisions in managing the firm's operations. It is a good starting point in evaluating the effectiveness and appropriateness of the previously executed decisions and initiating control measures in the subsequent period (Welc, 2022). Based on the company's financial position, managers can make better decisions. Investors and lenders derive their powers from the profitability, solvency, liquidity, and activity ratios in their decision-making for firms like Boot Barn Holdings.

By assessing the company's performance compared to the industry averages, we can find out if the company is operating below or above the industry averages. Boot Barn is better performing compared with industry ratios. During the year 2021, the company's performance improved. It means that the company is more efficient in reducing operating costs than other industry companies. The management employs above-average measures in making the company's revenues at the 17th position in the industry of 25 companies.

It is ethical to maximize the shareholders' wealth in the company over a period so that shareholders may acquire more dividends (DesJardins & McCall, 2014). The company reported improved performance in 2021, which maximized shareholders' resources. Managerial professionals are expected to continue making above-average decisions by shareholders to maximize their wealth.

Opinion 3

The product selected is Kentucky Fried Chicken (KFC), an American Fried chicken restaurant selling fast food. KFC has its trade secret of the crispy and flavor enhancer where not even those who make it know about it.

The production process involves at least three stages. The first stage is mixing ingredients that affect flour, salt, and baking powder, among other secret ingredients. It is this mixture that the raw chicken is mixed with. The chicken is first dipped in water before being put in the mixture. The chicken is then removed from the mixture and deep fried in a deep fryer machine (Food Network, 2020).

For a process to qualify for process costing, it should be able to be broken down into milestones, with each milestone having its finished product and costs ascertainable to it (Sharma, 2019). For KFC, the initial mixing of the ingredients with the raw chicken can be one process where ingredients and the chicken and direct labor for mixing are the costs, and deep frying can be the next process whose costs are the costs of cooking oil and labor. The final product will be obtained after frying, while the previous process's finished product will be the chicken just before it is fried. The mixing process of the ingredients can also be a stand-alone process for the product.

The first process would be the mixing process, and the second one is the deep-frying process. The departments to house these processes would be the Human resources department to manage labor and the procurement department to manage the processes inputs.

The first process would have ended work in progress because the mixed chicken is the input for the frying process. The units are raw chicken, almost white in color, with visible flour and baking powder. The chicken is not edible at that point.

Opinion 4

Costing is the accounting method that accumulates direct cost and allocate indirect cost in the manufacturing process of certain product. This product will have an average cost per unit. Companies with same product use this method to calculate individual cost of production. It is the managers to work hard to maintain control over the process.

Process cost have four basic steps to follow.

• Summarize the flow of physical units

• Compute terms of equivalent units.

• Summarize total costs to account for a compute equivalent unit cost.

• Assign total cost for units completed.

Costing methods and cost management techniques

Product Donut or Doughnut.

Donut or Doughnut are deep fried form a flour dough with various toppings and flavors. They are made with water, egg, milk, sugar, oil, and other materials.

Production process after the material is placed in the machine goes to the boiled to fried for about 30 to 45 minutes.

Process Create the order then create (Inventory) , after is process (Manufacturing).