Ben Franklin Career Center Setting Standard Costing Discussion

Write 4 different kind of peer review from the following discussion ( 5 sentences to each peer review ) Chapter 10: Standard Costing and Relevant Analysis undefined **Setting standard Costing** undefined The topic was interesting by showing how standards of costing are developed and set. Quantitative standards are set based on potential sources such as historical experience, business engineering studies, and inputs from the operations laborers (Mowen et al., 2011). Market forces determine the choices of the price standards. Purchasing and operating personnel highly influence the effectual setting of standards. Purchasing must be considerate of the discounts, freight, and quality while the operating personnel considers payroll taxes, fringe benefits, and qualifications. undefined **Variance analysis** undefined Variance analysis is an interesting concept in this topic due to its influence on business progress. It helps in measuring errors in the production process and other business activities. By measuring and examining variances, management regulates budgeting and formulates manageable budgets. Managers are capable of containing and controlling costs and improve operational efficiency through variance analysis. undefined **Use of Material and Labor Variances** undefined The use of the materials and labor variances shows how the variance analysis is integrated with the standards costing. Material cost variance yields the knowledge of how more or less cost has been incurred compared to the standard costing (Mowen et al., 2011). Labor variances, on the other hand, depict the effectiveness of the standard costings. These variances keep a tab on the deviations from the standard set by a company. undefined Chapter 11: Performance Evaluation & Decentralization undefined **Decentralization** undefined The concept of decentralization is comprehensively elaborated on in the topic. Many firms chose to decentralize to increase their overall efficiency. This is because, for a decentralized organization, lower-level managers are involved in decision making while, in centralized organizations, lower-level managers are only involved in the implementation of the decision (Mowen et al., 2011). Decentralization, therefore, improves product development through team innovations. undefined **Return on Investment** undefined The topic has involved the computation of return on investment (ROI) and how it matters in businesses. ROI is a business’s performance indicator since it determines the profitability of an expenditure. It is a roadmap for future business prospects since it assesses the success of the business over time. The main role of ROI is, therefore, evaluating the significance of an entrepreneurs’ investment in their business. undefined **Transfer Pricing** undefined The concept of transfer pricing makes the knowledge in the topic interesting as it has an impact on a decentralized organization. It ensures that businesses reflect their income attributable to controlled transactions. Transfer prices concern the top management and value the goods or services conducted by the low-level managers. Decentralized firms allow their various divisions to set their prices independently to maximize the profits. Contrarily, centralized firms set transfer prices at the marginal cost of the upstream division. undefined Chapter 12: Capital Investment Decisions undefined **Payback Period and Accounting Rate of Return** undefined The payback period and accounting rate of return computation for a proposed investment are fascinating in that they have a tremendous influence on capital expenditure decisions. Payback period computation measures investment risk; projects with long payback periods expose higher investment risk while those with short periods are less vulnerable to risks. The accounting rate of return assesses ROI while considering net income. Both concepts seem to be essential criteria in choosing investment projects. undefined **Internal Rate of Return** undefined Another interesting part of the topic is the assessment conducted by internal rate of return (IRR) to the acceptance of independent projects. IRR aids entrepreneurs in the prediction of the potential profitability of the business. Based on the IRR, a project may be accepted or rejected. This aids in formulating profitable cash investment decisions. undefined **Net Present Value** undefined The topic indicates why organizations consider net present value (NPV) in making capital investment decisions, especially in mutually exclusive projects. Investors prefer using net present value (NPV) instead of IRR since it provides a concise measure of future wealth creation based on the current dollar (Weygandt et al., 2020). NPV uses cash flows rather than net earnings in aiding investors to make substantive capital investment decisions. For the case of multiple projects, one can add projects to create aggregate wealth from all investable projects. undefined Chapter 13: Emerging Topics in Managerial Accounting undefined **Enterprise risk management** undefined Enterprise risk management (ERM) has been discussed intensively in the topic and the question that arises is “why is it important to understand the concept?” Based on the understanding in the text, ERM basically imparts knowledge of managing risks. It supports the better structure, reporting, analysis, and mitigation of risks. ERM success determines the duration and productivity of an enterprise. undefined **Lean Manufacturing** undefined The lean manufacturing concept is of interest in managerial accounting. Lean manufacturing strategy relates to various management, accounting, and control practices hence, its implementation has a dramatic influence on managerial accounting. The managerial and control practices include business reporting, value stream costing, employee empowerment, and visual performance and measurement information (Weygandt et al., 2020). Thus management accounting and control practices integrate to support lean manufacturing. undefined **Role of Management Accountants in International Environment** undefined It is also interesting to learn the roles management accountants have on the international business platforms. The accountants acquire and provide information to the business. Business information is crucial since it aids an organization to formulate production and marketing strategies such as technology use. The enterprise can therefore thrive in the global market and maximize profits.

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