Sunday, July 21, 2019
AirAsias Information Technology Strategy AirAsia was established in 1993 and commenced its operations on 18th November 1996. This airline was originally founded by a government owned conglomerate DRB-Hicom. However, on 2nd December 2001, the heavily indebted airline was purchased by former Time Warner executive Tony Fernandess company Tune Air Sdn Bhd for the token sum of one ringgit. Fernandes proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in KLIA at breakneck speed which undercutting former monopoly operator Malaysia Airlines with promotional fares as low as one ringgit. In 2003, AirAsia has opened a second hub at Senai International Airport in Johor Bahru which is near Singapore. And, it launched its first international flight to Bangkok. AirAsia has therefore started a Thai subsidiary, added Singapore to the destination list, and it commenced flights to Indonesia. Also, flight to Macau was started in June 2004 and flight to Mainland China and the Philippines started in April 2005. In addition, the flight to Vietnam and Cambodia is in the year 2005 while to Brunei and Myanmar is in 2006. With a strong yet simple slogan Now Everyone Can Fly, AirAsia has effectively placed its brand in customers mind when comes to selection of flight. In Malaysia, AirAsia is the second powerful national airline. Also, it was the first successful low cost and ticket-less airline in the Southeast Asian region. It is main based in the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). And, AirAsia has a registered office in Petaling Jaya, Selangor and its head office is on the grounds of KLIA in Sepang, Selangor. In addition, AirAsia is one of the successful businesses that have adopted cost leadership thoroughly through effectiveness and efficiency of the operation management. AirAsia has broken the travel norms around the world speedily and has become the worlds top airline. Beside this, AirAsia also has a route network that spans more than 20 countries; therefore it continues to pave the way for lower cost aviation through innovative solutions, more efficien t processes and a passionate approach to the business. The vision of AirAsia is to be the largest cost airline in Asia and for the purpose of serving the 3 billion people who are currently underserved with poor connectivity as well as high fares. There are 4 missions such as to be the best company to work for where the employees are treated as part of the big family in AirAsia, to create a ASEAN brand which is being recognized globally, to attain the lowest cost to make sure everyone in the world can fly with AirAsia, and to maintain the highest quality product by embracing technology in order to reduce cost and enhance the service levels of AirAsia. Apart from that, together with the associate companies such as AirAsia X, Thai AirAsia and Indonesia AirAsia, AirAsia is set to take the low cost flying. AirAsia X was established in 2007 in order to provide high frequency as well as point to point networks to the long haul business. Its cost efficiencies are derived from maintaining a simple aircraft fleet and a route network based on low cost airports. Hence, guests will continue to enjoy the low fares through cost savings that AirAsia pass on to the guests. Moreover, AirAsia X franchises the brand name of AirAsia, Asias largest low cost carrier which uses a common ticketing website, uniform, uniforms, and management style with AirAsia. AirAsia X is also affiliated with Virgin Group and Air Canada. Reasons for Adopting Information Technology (IT) There are some factors that contributed to the adoption of IT for AirAsia. As we know, airline companies involved in helping people move from one place to another. And, there are billions of people in this world. Without IT, airline companies will not process smoothly and it might lead to serious confusing among the customers and the company. Also, people in this society are having the same problems such as traffic jam, working pressure and time pressure. They are busy with their works and they focus more on efficiency and effectiveness. They do not want to spend extra time on irrelevant things such as queue up to buy something or waiting for long hours. Therefore, most airlines including AirAsia do offer online reservation for the flight as well as hotel rooms in order to save their customers time as well as enhance customer satisfaction. Apart from that, the technology is getting in advanced in this modern era. There are many companies who have adopted Information Technology (IT) in doing their business. And, this IT has helped in enhancing a better management of the operation of the companies. Also, people in this society are concern more on company who has adopted IT and how this IT will help in making their life better as well as decision making in some tasks. AirAsia therefore choose to adopt IT in its business as to follow up the current IT trend as well as fulfilling the demand of the people in this society. They also implemented different systems to enhance their overall operation which will lead to efficiency and effectiveness of AirAsia. IT Strategy AirAsia has some strategies initiatives which involve IT solutions in order to build its company share and reputation. In order to make its operation effective and efficient, AirAsia has implemented few IT systems in its marketing and sales activities. As you know, E-Commerce in nowadays has become a business tool and it is also a vital strategic management that allows a company to sell, advertise, purchase, supplies inventory tracking as well as sharing of information. Therefore, E-Commerce does become a major success to Airline Company that lead to effectively and efficiency in their business. AirAsia is one of the airline companies that implements E-Commerce and maximizes their information technology usage to manage their company effectively and efficiently including make low cost possibly in their business. In order to maximize their IT, AirAsia has implemented current IT systems, for examples, Yield Management System (YMS), Computer Reservation System (CRS), and Enterprise Resource Planning (ERP). These systems have indirectly generated extra revenues and build customer loyalty for AirAsia. Yield Management System (YMS) which also known as Revenue Management System (RMS) is the process of understanding, anticipating as well as influencing consumer behavior to maximize revenues or profits from a fixed perishable resource. Moreover, there is an important component in this system which is the use of overbooking where sometimes there must be a chance that a customer may not appear during that day. As a good example, it might be possible for a customer to book a ticket for a flight but did not turn up for the departure. And, this may cause the airline to end up flying an empty seat which will then cause lost in revenue for the airline company. But, in order to solve this problem, most airlines routinely overbook their flight. And, if there is an unusually large proportion of the customers show up, the company will be forced to bump some customers to another flight. Second, AirAsia using Customer Reservation System (CRS) which is an integrated web based reservation and inventory system. This includes Internet, airport departure control, call center, as well as others. This system is a direct sales engine that rid off the travel agents effectively and the need to pay for the sales commissions to them. And, CRS is totally customer friendly as the customer can buy or reserve a ticket directly via online without come to the ticket counter. This has brought more customers to use the website often thus reduce the extra costs of customer such as transportation costs. CRS also include Open Skies and New Skies. First, the Open Skies system is a built-in web enabled reservation as well as inventory system. The solution is built expressly in order to satisfy the distinctive needs of airlines that either implements a low cost business or in the process of making their business to more efficient streamline operations. Also, this system can be used either individually or combined yet it is depending on the persons needs. Open Skies helps some low cost airlines in worldwide to become a high performance business that continue to grow widely. On the other hand, New Skies is a next generation of reservation and distribution system. And, it is designed for the worlds fastest growing airlines which include newly launched airlines as well as rapidly growing hybrid airlines such as AirAsia. This system is a comprehensive airline passenger sales and management solution that provides capabilities for integrated online booking, call center reservations, inter-airline and alliance code-share itineraries, departure control as well as travel agency global distribution connectivity. Also, New Skies is based on the Navitaires Open Skies reservation and distribution system that have been used by over 40 of the worlds successful airlines. It represents a giant leap forward in quick deployment, speed to market with the new features and enhancements. New Skies has completely integrated departure control and real time reporting to keep your operation runs smoothly. Also, it is easy to use, change as well as customize. Third, AirAsia implements Enterprise Resource Planning (ERP) system. It is a packaged of business software that integrates organizational processes and functions into a unified system. It helps business management executives with a comprehensive overview of their complete business execution which may influence their business decisions indirectly. There are some examples of functions: Human Resource, Supply Chain Management, Finance and Logistics. These all are stand alone software and has their applications and database. But, with ERP System, all of this individual software can work under one umbrella. And, all the departments can share information easily and it helps to save time and cost. The workflow that has taken place between different departments becomes more automated. The customers also get better services as the person who is using the customer facing applications can access to every bit of information that regarding each relevant process. For an instance, a person who is w ork under sales team can access to the customers product which is still under manufacturing. In addition, ERP system helps to reduce the need to carry large inventories which will increase the operational and labor costs. And, this system is implemented in AirAisia thoroughly. Experience Resulting From The IT Implements Utilization of Information Technology (IT) have directly contributed to the promotional activities, enhance brand equity, and keep the cost as low as possible by enable the customer to direct purchase the ticket online or through sales offices. This has helped the customers to save airline agent fees. The systems that have been implemented by the AirAsia have a significant change to their company. First, AirAsia has used the Yield Management System (YMS) for taking the operating costs and in helping themselves to optimize the price as well as allocate the capacity for maximizing expected profits. For an instance, seats are revenues for AirAsia and other airline companies. Every seat is considered as a profit for them. Therefore, AirAsia has introduced a plan whereby seats are available at different prices in various points of time. Hence, reservation that has done in later time will be charged more compared to one who has reserved earlier for the same seat. As a result of this system, this has enabled AirAsia to understand the behavior of their respective customers and implement effective strategy to generate expected revenues with lowest cost. Second, AirAsia has implemented Computer Reservation System (CRS). AirAsia has used Open Skies to centralize customer data and this has helped AirAsia to track booking and the schedule of flight activities in real. Open Skies booking system which provided by Navitaire performed almost flawlessly on every single occasion and it managed to handle the most demanding requirements of AirAsias flight booking operations. On the other hand, on July 2010, AirAsia has successfully completed the implementation of its new reservation system which called New Skies. This booking system has replaced the previous system, Open Skies. Furthermore, this New Skies gives the customers a new experience as well as providing a greater convenience and generate more savings for the customers. New Skies booking system has make the procedure of booking more efficiently. This New Skies ensure the airlines to maximize the distribution channels and dynamics packaging that emphasize on direct Internet sales. For distribution, New Skies gives AirAsia the control that they need over how quickly they deploy sales fares, special promotion, discounts and electric vouchers to stay ahead of the competitors. This is wise useful for AirAsia in this modern era. It also eliminates the need to maintain multiple databases associated with paper and e-tickets which indirectly increase the operational costs. Same with Open Skies, this New Skies enable the customers to continue booking online and the AirAsia sales offices, counters as well as the call center. They also can normally self check in via the web, mobile and kiosks at the airport together with the self manage options online such as adding check in baggage weight, pick a seat and pre-book meals. However, there are some differences between the Open Skies and New Skies booking system. With the new reservation system, the customers can look for the new feature which is Low Fare Finder. It helps the customers to view the lowest fare available according to their selected destination and date for travel. Also, the customers now are able to book their seats for multi-cities in just one transaction only. For an instance, if the customer plans to fly from Kuala Lumpur to Perth to Singapore and return, the respective customer do not have to make two separate bookings which is only provided by the new reservation system only. In addition, this New Skies booking system is able to support characters such as Mandarin, Japanese and other languages whereby the Open Skies system was able to support alphanumeric characters only. Hence, AirAsia can target multilingual customers globally and stay ahead in the airline industry. Lastly, Enterprise Resource Planning (ERP) is implemented by AirAsia as this enables AirAsia to successfully maintain process integrity, reduce the financial month-end closing processing time, and speed up the reporting as well as data retrieval process. Every department such as financial, marketing and sales are unified into a single IT system to allow the employees to make decisions by viewing enterprise wide information on all airline operations. And, this system helps AirAsia by focusing on capturing transactions in daily operations therefore it helps to save operational costs and this indirectly increase the efficiency and effectiveness in its operation management.
Methods and Models for Measuring Costs Costs are associated with all types of organizations business, non-business, manufacturing, retail and service. Generally, the kinds of costs that are incurred and the way in which these costs are classified depend on the type of organization involved. In your assignment you should explain with examples (use dollar value in your examples): How to measure cost behaviour (cost measurement)? In management accounting, the classification and measurement of fixed and variable cost is based on a body of knowledge that involves a number of assumptions. In many cases, the usefulness of fixed and variable cost data depends on the validity of these assumptions. In order to avoid poor operating results and faulty decision-making that is likely to occur when false cost assumptions are made, the ability to recognize and measure cost behavior is essential. Various theories of Cost behavior are as follows : Variable Cost varies proportionately in total but remains constant on a per unit basis. a. True variable costs proportionately variable (ex. Raw material) amount used directly increases as production increases by the same percentage. b. Step variable costs costs obtainable in large segments (ex. Labor costs of maintenance workers) and that increase or decrease in response to fairly wide changes in activity levels. NOTE: these costs are constant for a certain activity level (relevant range) and then vary in a step like fashion as volume increases. 2. Fixed Costs remain constant in total but vary inversely on a per unit basis (if production increases, then per unit cost decreases; if production decreases, then per unit cost increases) a. Committed fixed costs relate to the investment in plant, equipment and the basic organizational structure of the firm (ex. Depreciation of building and equipment, real estate taxes, insurance, management salaries, etc.) are long term in nature cannot be reduced immediately over a short period of time without seriously impairing either the profitability or the long run goals of a firm. b. Discretionary Fixed Costs ( Managed Fixed Costs ) arise form annual decisions by management to spend in certain fixed costs areas (ex. Advertising, research, management development programs) short term in nature, usually a single year possible to cut back on certain costs for short periods of time with minimum disruptions to long term goals. c. Semi variable or Mixed Costs contains both variable and fixed costs elements at certain levels of activity mixed costs display the same characteristics as a fixed cost at certain levels they display same characteristic as a variable cost (examples: electricity, heat, telephone, maintenance, car rental,copy machine rental) 3. Direct or Indirect Costs a. Direct Costs can be physically traced to the particular segment under consideration (product line, sales territory, division, etc.) b. Indirect Costs must be allocated in order to be assigned to the segment under consideration (indirect cost is manufacturing overhead). NOTE: Indirect Costs are also called Common Costs. 4. Additional Cost Terms a. Controllable Costs if management at a certain level as the power to authorize and influence the cost b. Noncontrollable Costs if management at a certain level is unable to influence the incurrence of the cost. c. Differential Cost present under one alternative but is absent under an alternative course of action. NOTE: Differential costs are also known as incremental costs. d. Opportunity Cost potential benefit that is lost or sacrificed whenzselecting one course of action makes it necessary to give up a differentÃ course of action. Opportunity cost is not recorded in the books of an organization, but isÃ considered in every decision. e. Sunk Cost already incurred and cannot be changed by any decision made now or in the future. An irrelevant cost in decision-making. The econometrical model which is used to analyze costs is a model in which explanatory variable represents total costs and endogenous variables represent factors that influence their level. Production quantity is the most important factor which determines the level of total costs. Total costs consist of two parts: total fixed costs, which appear independently of the production quantity (when production level is zero) total variable costs, which are dependent only on the production quantity Cost Function : K = F + VX (Where K is total cost, F is Fixed Cost , V is Variable Cost and X is volume) What is cost accounting system and cost allocation?(Managerial Accounting) Sol:Cost accounting is linked to tax accounting, financial accounting and managerial accounting because it is an important component of each discipline as cost accounting involves determining the cost of something, such as a product, a service, an activity, a project, or some other cost object. These costs are needed for several purposes. For example, the costs of products and services produced and sold are needed for both tax and external financial statements. In other words, tax and financial accounting depend on cost accounting to provide cost information. Information about costs is also needed for a variety of management decisions. For example, cost estimates are needed to determine whether or not a product or service can be produced and sold at a profit. Unit costs of a product (or service) are also needed for product pricing and product discontinuance decisions. In addition, accurate cost information is required to determine whether or not a company should make (produce) or buy the raw materials, parts and subassemblies that become part of its major products and services. From this perspective, cost accounting is perhaps underrated as a discipline since none of the other disciplines including tax accounting, financial accounting or managerial accounting could exist without cost accounting. The costs associated with a manufacturing firm are separated into two broad categories. These include manufacturing costs and selling and administrative costs. This functional separation is important because each category of cost is treated differently in the accounting records. The different treatments are required to obtain proper matching. Manufacturing Costs There are three types of manufacturing costs. These include: 1) direct material or raw material, 2) direct labor, and 3) indirect manufacturing costs, or factory overhead. Direct material becomes the product, or becomes a part of the product. Direct labor converts the direct material into a finished product. Factory overhead represents all the other factory costs that cannot be directly identified with a particular product. This indirect category includes a variety of costs that are discussed in more detail in subsequent chapters. These three types of costs are also referred to as product costs, or inventorial costs, because they are capitalized in (or charged to) the inventory, i.e., they become assets. Matching Accountants capitalize manufacturing costs to obtain proper matching. The matching concept is pervasive in accrual accounting and requires that costs and benefits are matched or brought together on the income statement. In a production setting, the idea is to match the costs of producing a product (or service) against the benefits, i.e., revenue derived from the sale. When the inventory is sold, these costs are charged to an expense account referred to as cost of goods sold. At the end of the accounting period, cost of goods sold is closed to the income summary where, theoretically, matching takes place. Remember that unexpired costs represent assets. Expired costs represent expenses. When the inventory is sold, we say these costs have expired, i.e., the benefits to be obtained (from the effort that generated the costs) have been recognized. Thus, manufacturing costs become expenses when they reach cost of goods sold, but represent assets until the sale takes place. Selling and Administrative Costs In traditional accounting systems, selling and administrative costs are expensed in the period in which they are incurred. Theoretically, if there are future benefits associated with a cost, the cost should be capitalized as an asset rather than expensed. Certainly there are some future benefits associated with costs such as research and development, training, market promotion and advertising. However, these costs are expensed as incurred because it is difficult if not impossible to relate them to the future benefits. As a result, these costs are referred to as period costs. COST BEHAVIOR AND PREDICTION In addition to separating costs into categories such as direct and indirect and manufacturing and non-manufacturing, costs are also frequently identified by their behavior in relation to changes in an activity level. This separation is helpful for planning and budgeting purposes. The major types of costs, in terms of cost behavior, are: 1) variable costs, and 2) fixed costs, 3) semi-variable costs and 4) semi-fixed costs. These concepts are illustrated graphically in Exhibit 1-3 and discussed individually below. Variable Costs Variable costs are those costs that vary with changes in the level of activity. Variable costs tend to increase at various rates that generate linear (straight line) or a variety of non-linear cost functions when the costs are plotted on a graph. The major activity that affects manufacturing costs is production volume, i.e., producing output. Production volume is frequently measured in terms of units produced, direct labor hours used, machine hours used, materials costs or some other production volume related measure. However, other activities that are not related to production volume might also be important in analyzing cost behavior. The recognition that non-production volume related activities also cause, or drive costs is a fundamental idea associated with activity based costing (ABC) Fixed Costs Fixed costs are defined as those costs that do not vary with changes in the activity level. However, this does not mean that fixed costs remain constant. If a production volume based measure is used as the activity, a cost that changes for some reason other than a change in production activity is considered fixed. This simply means that the cost is driven by a non-production volume related phenomenon. For example, property taxes are considered fixed in traditional cost accounting systems that are typically based on production volume related activities. However, property taxes change when the taxing authority changes the tax rate or reassesses the property. The idea to grasp is that the designation of a particular cost as fixed or variable can change when it is analyzed in relation to a different activity. It is also important to understand that the notion of fixed and variable costs is a short run concept. All costs tend to be variable in the long run. Semi-Variable and Semi-Fixed Costs Semi-variable costs are part fixed and part variable. There is a minimum cost (the fixed portion) and a variable portion that increases as activity increases. There are also semi-fixed costs that do not change continuously as the level of activity changes, but do increase in steps as activity increases beyond various levels. These costs are sometimes referred to as step cost and step functions. For example, a single production supervisor (whos salary normally represents a fixed cost) might be adequate until production reaches a certain level, then a second supervisor would need to be hired. Supervisory costs might be driven by the number of production shifts. Cost accounting system requires five parts that include: 1) an input measurement basis, 2) an inventory valuation method, 3) a cost accumulation method, 4) a cost flow assumption, and 5) a capability of recording inventory cost flows at certain intervals. These five parts and the alternatives under each part are summarized in Exhibit 2-1. Note that many possible cost accounting systems can be designed from the various combinations of the available alternatives, although not all of the alternatives are compatible. Selecting one part from each category provides a basis for developing an operational definition of a specific cost accounting system. 1) INPUT MEASUREMENT BASES The basis of a cost accounting system begins with the type of costs that flow into and through the inventory accounts. There are three alternatives including: pure historical costing, normal historical costing and standard costing. Pure Historical Costing In a pure historical cost system, only historical costs flow through the inventory accounts. Historical costs refers to the costs that have been recorded. The term actual costs is sometimes used instead, but the term actual seems to imply that there is one true cost associated with a particular output. But determining the cost of a product, or service requires many cost allocations, e.g., allocating the cost of fixed assets to time periods, and allocating indirect manufacturing costs, or overhead to products. Since there are many alternative allocation methods, (e.g., straight line or accelerated depreciation) the calculated cost of a unit of product or service simply represents an attempt to approximate the true cost. Normal Historical Costing Normal historical costing uses historical costs for direct material and direct labor, but overhead is charged, or applied to the inventory using a predetermined overhead rate per activity measure. Typical activity measures include direct labor hours, or direct labor costs. The amount of factory overhead charged to the inventory is determined by multiplying the predetermined rate by the actual quantity of the activity measure. The difference between the applied overhead costs and the actual overhead costs represents an overhead variance. Standard Costing In a standard cost system, all manufacturing costs are applied, or charged to the inventory using standard or predetermined prices, and quantities. The differences between the applied costs and the actual costs are charged to variance accounts as shown symbolically in the enlarged graphic below. The variances provide the basis for the concept of accounting control, that is somewhat different from the statistical control concept 2) FOUR INVENTORY VALUATION METHODS The four inventory valuation methods that appear in Exhibit 2-1 are arranged in the order of the amount of cost that is traced to the inventory. The throughput method involves tracing the least amount of cost to the inventory, while the activity based method includes tracing the greatest amount of costs to the inventory. In direct (or variable) costing, a greater amount of cost is traced than in the throughput method, but a lesser amount than in the full absorption method. Direct costing and full absorption costing are the traditional methods, while the throughput and activity based methods are relatively new. These inventory valuation methods are very important because they control the manner in which net income is determined. As we shall see is this chapter and subsequent chapters, the amount of net income can vary substantially for different inventory valuation methods. The Throughput Method The throughput method was developed to complement a concept referred to as the theory of constraints. In this method only direct material costs are charged to the inventory. All other costs are expensed during the period. The concept is symbolized in the enlargement below. Sales, less direct material costs is referred to as throughput which reflects how the method got its name. The throughput method does not provide proper matching (as defined by GAAP) because all manufacturing cost, other than direct material are expensed when incurred rather than capitalized in the inventory. Therefore, the throughput method is not acceptable for external reporting although advocates argue that it provides many advantages for internal reporting. The Direct or Variable Method In the direct (or variable) method, only the variable manufacturing costs are capitalized, or charged to the inventory. Fixed manufacturing costs flow into expense in the period incurred. This method provides some advantages and some disadvantages for internal reporting. However, it does not provide proper matching because the current fixed costs associated with producing the inventory are charged to expense regardless of whether or not the output is sold during the period. For this reason direct costing is not generally acceptable for external reporting. The Full Absorption Method Full absorption costing (also referred to as full costing and absorption costing) is a traditional method where all manufacturing costs are capitalized in the inventory, i.e., charged to the inventory and become assets. This means that these costs do not become expenses until the inventory is sold. In this way, matching is more closely approximated. All selling and administrative costs are charged to expense. Technically, full absorption costing is required for external reporting, although many companies apparently use something less than a pure full absorption costing system. The full absorption method is also frequently used for internal reporting. The second major section of this chapter compares the income statements for full absorption costing with those used for direct costing because they are by far the dominant methods. The Activity Based Method Activity based costing is a relatively new type of procedure that can be used as an inventory valuation method. The technique was developed to provide more accurate product costs. This improved accuracy is accomplished by tracing costs to products through activities. In other words, costs are traced to activities (activity costing) and then these costs are traced, in a second stage, to the products that use the activities. The concept of ABC is illustrated in the enlarged graphic below. Another way to express the idea is to say that activities consume resources and products consume activities. Essentially, an attempt is made to treat all costs as variable, recognizing that all costs vary with something, whether it is production volume or some non-production volume related phenomenon. Both manufacturing costs and selling and administrative costs are traced to products in an ABC system. Note that treating selling and administrative costs in this way is not acceptable for external repor ting. 3) FOUR COST ACCUMULATION METHODS Cost accumulation refers to the manner in which costs are collected and identified with specific customers, jobs, batches, orders, departments and processes. The center of attention for cost accumulation can be individual customers, batches of products that may involve several customers, the products produced within individual segments during a period, or the products produced by the entire plant during a period. The companys cost accumulation method, or methods are influenced by the type of production operation and the extent to which detailed cost accounting information is needed by management. Job Order In job order costing, costs are accumulated by jobs, orders, contracts, or lots. The key is that the work is done to the customers specifications. As a result, each job tends to be different. For example, job order costing is used for construction projects, government contracts, shipbuilding, automobile repair, job printing, textbooks, toys, wood furniture, office machines, caskets, machine tools, and luggage. Accumulating the cost of professional services (e.g., lawyers, doctors and CPAs) also fall into this category. Chapter 4 illustrates a cost accounting system that includes normal historical costing as the basic cost system, full absorption costing as the inventory valuation method and job order costing as the cost accumulation method. Process In process costing, costs are accumulated by departments, operations, or processes. The work performed on each unit is standardized, or uniform where a continuous mass production or assembly operation is involved. For example, process costing is used by companies that produce appliances, alcoholic beverages, tires, sugar, breakfast cereals, leather, paint, coal, textiles, lumber, candy, coke, plastics, rubber, cigarettes, shoes, typewriters, cement, gasoline, steel, baby foods, flour, glass, mens suits, pharmaceuticals and automobiles. Process costing is also used in meat packing and for public utility services such as water, gas and electricity. Back Flush Back flush costing is a simplified cost accumulation method that is sometimes used by companies that adopt just-in-time (JIT) production systems. However, JIT is not just a technique, or collection of techniques. Just-in-time is a very broad philosophy, that emphasizes simplification and continuously reducing waste in all areas of business activity. JIT systems were developed in Japan and depend on the communitarian concepts of teamwork and continuous improvement. In fact, many of the assumptions, attitudes and practices of communitarian capitalism are included in the JIT philosophy. One of the many goals of JIT systems is zero ending inventory. In a backflush cost system, manufacturing costs are accumulated in fewer inventory accounts than when using the job order or process cost methods. In fact, in extreme backflush systems, most of the accounting records are eliminated. The production facilities are also arranged in self contained manufacturing cells that are dedicated to the production of a single, or similar products. In this way more of the manufacturing costs become direct product costs and fewer cost allocations are necessary. Thus, more accurate costing is obtained in spite of the fact that the cost accumulation method is simplified. The just-in-time philosophy and related accounting methods are discussed in Chapter 8. Hybrid, or Mixed Methods Hybrid or mixed systems are used in situations where more than one cost accumulation method is required. For example, in some cases process costing is used for direct materials and job order costing is used for conversion costs, (i.e., direct labor and factory overhead). In other cases, job order costing might be used for direct materials, and process costing for conversion costs. The different departments or operations within a company might require different cost accumulation methods. For this reason, hybrid or mixed cost accumulation methods are sometime referred to as operational costing methods. 4) FOUR COST FLOW ASSUMPTIONS A cost flow assumption refers to how costs flow through the inventory accounts, not the flow of work or products on a production line. This distinction is important because the flow of costs is not always the same as the flow of work. The various types of cost flow assumptions include: specific identification (e.g., by job), first in, first out, last in, first out and weighted average. Costs flow through the inventory accounts by the job in a job order cost system which represents an example of specific identification. The requirements of the various jobs determines the timing of the cost flows. Simple jobs tend to move through the system faster than more complex jobs. The first-in, first-out (FIFO) and weighted average cost flow assumptions are used in process costing. Since costs are accumulated by the process or department in a process cost environment, a cost flow assumption is needed to determine the treatment of the beginning inventory. When FIFO is used, it is assumed that the units of product in the beginning inventory are finished first and transferred to the next department before any of the units that are started during the period. The group of units in the beginning inventory maintain their separate identity and prior period costs. However, when the weighted average cost flow assumption is used, the beginning inventory units lose their separate identity because they are lumped together with the units of product started during the period. Process costing tends to be fairly challenging, therefore you may find these introductory concepts to be confusing. Although last-in, first-out (LIFO) is frequently used for tax reporting purposes, it is not normally used in the accounting records. For this reason, we consider the FIFO and weighted average cost flow assumptions in Chapter 5, but leave the LIFO cost flow assumption for courses that emphasize financial and tax reporting. 5) RECORDING INTERVAL CAPABILITY Inventory records can be maintained on a perpetual or a periodic basis. Conceptually, the perpetual inventory method provides a company with the capability of maintaining continuous records of the quantities of inventory and the costs flowing through the inventory accounts. The periodic method, on the other hand, requires counting the quantity of inventory before inventory records can be updated. In the past, manufacturers tended to keep perpetual inventories, while retailers used the periodic method. However, today a variety of modern point of sale devices and dedicated microcomputer software are readily available to provide any company with perpetual inventory capability. Cost allocation is the assigning of a common cost to several cost objects. For example, a company might allocate or assign the cost of an expensive computer system to the three main areas of the company that use the system. A company with only one electric meter might allocate the electricity bill to several departments in the company.Allocation implies that the assigning of the cost is somewhat arbitrary. Some people describe the allocation as the spreading of cost, because of the arbitrary nature of the allocation. Efforts have been made over the years to improve the bases for allocation. In manufacturing, the overhead allocations have moved from plant-wide rates to departmental rates, from direct labor hours to machine hours to activity based costing. The goal is to allocate or assign the costs based on the root causes of the common costs instead of merely spreading the costs. Direct costs can be physically traced to each department.Indirect costs must be allocated. Many companies develop allocation methods to assign service department costs to the producing departments. All organizations accumulate costs for their products or services for financial reporting purposes. An accounting system will assign to a departments output all its direct costs plus all the indirect costs allocated to it. A cost driver that has a logical, cause-effect relationship to the cost will be used as a cost-allocation base. Linking costs with cost objectives is accomplished by selecting cost drivers.When used for allocating costs, a cost driver is often called a cost-allocationbase. Major costs, such as newsprint for a newspaper and direct professionallabour for a law firm, may each be allocated to departments, jobs, and projects on an item-by-item basis, using obvious cost drivers such as tonnes of newsprint consumed or direct-labour-hours used. Other costs, taken one at a time, are not important enough to justify being allocated individually. These costs are pooled and then allocated together. A cost pool is a group of individual costs that is allocated to cost objectives using a single cost driver. For example, building rent, utilities cost, and janitorial services may be in the same cost pool because all are allocated on the basis of square metres of space occupied. Or a university could pool all the operating costs of its registrars office and allocate them to its colleges on the basis of the number of students in each faculty. In summary, all costs in a given cost pool should be caused by the same factor. That factor is the cost driver. Many different terms are used by companies to describe cost allocation in practice. You may encounter terms such as allocate, attribute, reallocate, trace, assign, distribute, redistribute, load, burden, apportion, and reapportion, which can be used interchangeably to describe the allocation of costs to cost objectives. The allocation of costs is necessary when the linkage between the costs and the cost objective is indirect. In this case, a basis for the allocation, such as direct-labour-hours or tonnes of raw material, is used even though its selection is arbitrary. A cost allocation base has been described as incorrigible, since it is impossible to objectively determine which base perfectly describes the link between the cost and the cost objective. Given this subjectivity in the selection of a cost-allocation base, it has always been difficult for managers to determine When should costs be allocated? and On what basis should costs be allocated? The answers to these questions depend on the principal purpose or purposes of the cost allocation. Costs are allocated for three main purposes: 1. To obtain desired motivation. Cost allocations are sometimes made to influence management behaviour and thus promote goal congruence and managerial effort. Consequently, in some organizations there is no cost allocation for legal or internal auditing services or internal management consulting services because top management wants to encourage their use. In other organizations there is a cost allocation for such items to spur managers to make sure the benefits of the specified services exceed the costs. 2. To compute income and asset valuations. Costs are allocated to products and projects to measure inventory costs and cost of goods sold. These allocations frequently service financial accounting purposes. However, the resulting costs are also often used by managers in planning, performance evaluation, and to motivate managers, as described above. 3. To justify costs or obtain reimbursement. Sometimes prices are based directly on costs, or it may be necessary to justify an accepted bid. For example, government contracts often specify a price that includes reimbursement for costs plus some profit margin. In these instances, cost allocations become substitutes for the usual working of the marketplace in setting prices. . What is activity based costing? (ABC system)? Sol : In the past, the vast majority of departments used direct labour hours as the only cost driver for applying costs to products. But direct labour hours is not a very good measure of the cause of costs in modern, highly automated departments. Labour-related costs in an automated system may be only 5 percent to 10 percent of the total manufacturing costs and often are not related to the causes of most manufacturing overhead costs. Therefore, many companies are beginning to use machine-hours as their cost-allocation base. However, some managers in modern manufacturing firms and automated service companies believe it is inappropriate to allocate all costs based on measures of volume. Using direct labour hours or cost-or even machine hours-as the only cost driver seldom meets the cause/effect criterion desired in cost allocation. If many costs are caused by non volume-based cost drivers, Activity-Based Costing (ABC) should be considered Activity Based Costing (ABC) is an economic model that identifies the cost pools or activity centers in an organization and assigns costs to cost drivers based on the number of each activity used. It identifies activities in an organization and assigns the cost of each activity resource to all products and services according to the actual consumption by each: it assigns more indirect costs (overhead) into direct costs.In this way, an organization can precisely estimate the cost of individual products and services so they can identify and eliminate those tha
Saturday, July 20, 2019
When imagining the Cold War, it is safe to assume that most people envision a picture that of its namesake; a game of spy versus spy, secret black operations and nuclear threats, with no major physical conflict. However, contrary to the aforementioned portrait, and the given label, the Cold War was anything but Ã¢â¬Å"cold.Ã¢â¬ Not only was there physical conflict, but full-scale wars, fought out on the battlefield rather than the podium. Engulfed at the start was the Korean War, a bloody wake-up call for America on how far the Communists will fight for their government. A fact to be once again reinforced with the Vietnam War, both of which shook America up to the point of questioning their own Ã¢â¬Å"invincibility.Ã¢â¬ The Ã¢â¬Å"revelationÃ¢â¬ in the United States was due to the outcome of both wars, which points to the inarguable fact that our quest to stop Communism in Asia was an overall failure. The fact that the United States was not the global dominant power thought to be after WWII was a tough truth to swallow for the American populace at the time (and perhaps today). After WWII, the US was exhausted, battered, and relieved. Years of fighting finally ended how it began: with the bombing of an unsuspecting populace. A hypocritical, albeit Ã¢â¬Å"necessaryÃ¢â¬ evil. With the newly established United Nations, the world could finally rest in peace. However, the US and its allies now how had a bigger problem to contend with. Many people saw it coming, even before the end of the war. General George S. Patton saw threat in the Soviet Union's power, even while US troops were fighting and dying alongside them. However, despite the warnings, the United States failed to act, and thus, found themselves reacting to Russia's every move. The lines were set, the alliances... ... topic on the minds of even the truest patriots: Did we win? Some might argue yes, since South Korea remains a democratic state today, a fact that cannot be stated if North Korea had won. However, some might argue the opposite; the fact that North Korea is still a thorough-bred communist threat proves that we failed our goal of uniting Korea under a democratic government. The line between winning and losing was, and is, too blurry to accurately decide a conclusion. This was in sharp contrast to WWII, or WWI, or even as far back as the Spanish-American war, where America won. America always wins, right? For the first time in almost 200 years, the answer to that question is no longer clear. And that scared the American people. And with that scare, the cracks of doubt formed in the window of invincibility. A window about to be shattered, by the Iron Hammer of Communism.
Friday, July 19, 2019
Cognitive-Behavioral Therapies for Posttraumatic Stress Disorder Posttraumatic stress disorder (PTSD) is classified as an anxiety disorder that can develop after an individual has observed and/or experienced an extreme traumatic event that involved actual or threatened death or serious injury to oneÃ¢â¬â¢s self or another (APA, 2000). An extreme traumatic event can include, but is not limited to, military combat, terrorist attacks, natural or manmade disasters, sexual assault, physical assault, robbery, and torture (APA, 2000). The type of traumatic event could influence the way in which medical and mental health care professionals assess, conceptualize, and subsequently treat the individuals with a PTSD diagnosis. For this reason, sexual assault, as the traumatic event that led to the development of a PTSD diagnosis, will be the focus of discussion. The current statistics on sexual assault exemplify the need to focus on this particular population. For example: every two minutes, someone in the United States is sexually assaulted, and each year there are about 213, 000 survivors of sexual assault (RAINN, 2009). The purpose of this paper, then, is to explore how cognitive-behavioral therapies assess, conceptualize, and treat clients with a sexual assault history and a PTSD diagnosis. Treatment Components of Cognitive-Behavioral Therapy The treatment components of cognitive-behavioral therapy (CBT) that are typically utilized in the treatment for PTSD include psychoeducation, prolonged exposure and/or in vivo exposure, cognitive restructuring, and anxiety management (Harvey, Bryant, & Tarrier, 2003). Psychoeducation Psychoeducation includes providing the client with information about the common symptomology that may be experien... ... conceptualize, and treat clients with a sexual assault history and a PTSD diagnosis. The sexual traumatic event, experienced by the client, may elicit negative PTSD-related cognitions that are perpetuated by avoidant behavior. Prolonged exposure, in vivo exposure, and cognitive restructuring can challenge and correct such negative cognitions and avoidant behaviors. Psychoeducation can provide information, as well as a rationale about therapy, whereas anxiety management training can provide coping skills to engage in exposure and cognitive restructuring interventions. In general, cognitive-behavioral therapies can provide the means by which to assess, conceptualize, and treat clients, and has also shown to be efficacious (Dobson, 2010; Dobson & Dobson, 2009; Foa et al., 1999; Foa & Rauch, 2004; Harvey, Bryant, & Tarrier, 2003; McDonagh et al., 2005; Roman, 2010).
When I first sat down to write this statement letter I had hundreds of ideas. I am not writing this letter to be a sob story of my life and the wrong choices I have made, but a statement of growth and encouragement for my future. I am a 33yr old male of mixed race (Mexican and African American). In my family education was important, my grandmother only has a 12th grade education and she had it a lot harder than me coming from Chihuahua, Mexico to the United States, so they tried to stress the importance of an education. It has taken me 12 years to realize that I need a college education, an education that seems to be slowly slipping out of my grasp because of my inability to pay for school. I am currently a student at Oakton Community College; I started with my first class last summer to see what college life is or if I could make it in school setting after all these years. I took Intro to Criminal justice, I was told to take easier class to work my way up to harder classes. I donÃ¢â¬â¢t want easy, easy would have been 12 yrs ago when I should have gone to college. I passed the class with an Ã¢â¬Å"AÃ¢â¬ grade, happy I was but not satisfied with just passing this class. I still need to see if I could work a full time job and go to school full time. Fall classes were more difficult than I thought with my success from the season, I passed with Ã¢â¬Å"BÃ¢â¬ and 2 Ã¢â¬Å"CÃ¢â¬ . This was upsetting to me, for the first time I cared about a grade I received. Passing is not good enough, I need to pass with good grades (I strive to achieve my goals)! My career goal is Law enforcement, Police Officer (State or Local), Forensic Scientist, Criminologist or Government Enforcement. Obtaining a degree in my chosen profession would allow me to open doors. The disadvantages that I have faced without a college degree has led me to many obstacles in my life. The multitude of financial obligations that I face from day to day is sometimes overwhelming. With my current employment, the future looks no better. Attending Oakton is allowing me to reach my career goals and to pursue my dreams.
Thursday, July 18, 2019
The title of this paper inspires examination of leadership style within the corporate culture with regard to personal traits in relation to organisational behaviour. The old standard of a leader being born rather than made is under review here as many concepts come into play when discussing modern corporate leadership. Many would argue and research reflects (Goleman, D. , Boyatzis, R. , & McKee, A. 2001) leaders adjust style according to situations. A situation is just one influence affecting oneÃ¢â¬â¢s leadership capabilities. The organisational culture brings into play a myriad of factors that affect leadership. Stogdill (1948/1974) built the foundation for modern leadership where creative thinking and flexibility become key because personality became central to understanding situations found in corporate culture. Stogdill writes Ã¢â¬Å"no personal characteristics are predictive of leadership seems to over-emphasise the situational and underestimate the personal nature of leadershipÃ¢â¬ (p. 35Ã¢â¬âcheck your book for ref). Research into the history of leadership lends another view entirely. Such researchers of leadership and organisational behaviours as Boddy and Burns find early on the icon of leadership was based on an egalitarian view of the best Ã¢â¬Å"manÃ¢â¬ for the job. Stogdill found different views but related findings to behaviour. Now many years later, is the nature of leadership based in situations? Or is it based in oneÃ¢â¬â¢s personal experience and choices in reacting to certain situations? I believe the face of corporate culture has changed because of certain factors present today in the business world. Today, gender, race and other demographic factors play a large role in management. How people interact and how these demographics influence the behaviour of the organisation needs to be examined because this makes the culture. In todayÃ¢â¬â¢s business world because competition is fierce, anything innovative and flexible to opening up channels of creativity is seen as a positive. Organisational culture is born out of an organisationÃ¢â¬â¢s core values and beliefs in completing its objectives (Robbins 2001, p. 544). This can also be said of people as a culture within race, religion and creed. How an organisation takes external factors like an individualÃ¢â¬â¢s demographic can be a complex task. How people perceive his or her is directly influenced by his or her personal experiences and make-up. In this respect because of globalization and multiculturalism, an organisation needs to be flexible to outside influences within reason. This means than an organisational culture has the means of redefining itself as more people join. Of course the organisation must conscious that these factors are at work and this means sticking to the core values. In this respect, I must agree with StogdillÃ¢â¬â¢s statement because the human experience, these demographics touched upon above, makes oneÃ¢â¬â¢s personality and makes culture personal. It makes the act of leading based from oneÃ¢â¬â¢s experience and therefore, very personal. One can see such proof within the literature but really oneÃ¢â¬â¢s personal experience and how they use these traits builds character and influences many areas of organisational behaviour such as tools for motivation, team-building and creative thinking. Personal Nature of Leadership The personal connection begins at a fundamental level of human sociology where the use of story is central. Howard Gardner (1995) reflects, Ã¢â¬Å"the ultimate impact of the leader depends most significantly on the particular story that he or she relates or embodies, and the receptions to that story on the part of the audiencesÃ¢â¬ (p. 14). By telling stories, allows for a certain level of openness or vulnerability on the part of the leader and makes them human. By opening the line of communication, gives the employee knowledge of their environment and develops trust. The leaderÃ¢â¬â¢s role is to sell the idea of commitment within a culture. Odiorne (1987) suggests, Ã¢â¬Å"if employees know what is expected, and what help and resources are available, they can then be relied upon to govern their actions to achieve the commitments they have madeÃ¢â¬ (p. 138). This sets the stage for goals and achieving high performance. The culture in turn feeds off this energy and excitement. Bennis (1989) writes: There are three reasons why leaders are important. First they are responsible for the effectiveness of organizations. Second, the change and upheaval of past years has left us with no place to hide. We need anchors in our lives as a guiding purpose. Third, there is a national concern about integrity of our institutions. Being mindful of own context is difficult for us. (p. 15-16) Managers with a keen understanding of leading represent these three key attributes and create a foundation from which to act. A leader must also display curiosity and have the guts to be daring. This requires someone to make a choice based upon his or her ability to risk take. They must be a dominant force within the team. Bennis (1989) reflects, there are two kinds of people Ã¢â¬Å"those who are paralyzed by fear, and those who are afraid but go ahead away. Life is not about limitation but optionsÃ¢â¬ (p. 185). A healthy culture inspires options and the innovations that grow out of creativity. Research discovered that leaders use different leadership styles for different situations because of emotional intelligence and its tie to strengths or weaknesses in personal traits. In the book Primal Leadership, authors David Goleman, Richard Boyatzis , and Annie McKee (2001) present their research on leadership styles within the organisational structure. The research discusses the relationship that these executives have with their emotional intelligence. Emotional intelligence is the study of emotions and their impact upon the work environment. The research investigates the different leadership styles evident in most organisations today. Mainly, leaders were categorized as either having the visionary, coaching, affiliative, democratic, pacesetting, or commanding leadership styles. Among these, only pacesetting and commanding are assessed to be less effective than the other leadership styles. Emotional Intelligence relies upon the fact the leader will be able to have a competent level of interaction with the employee by changing leadership styles and adapting to each unique situation throughout the time at work. It reflects successful leadership by allowing for complex relationships for team members by recognizing relationship building, capacity of visions and personal development. Emotional Intelligence for a leader means being able to read people, be read and allow for open dialogue. Research stresses the importance of the leaderÃ¢â¬â¢s flexibility and capability to adapt to his or her environment. An effective leader will understand not only their environment and people but also understand the potential for impact upon that environment. By understanding this key element, an effective leader will know how to define the environment. This is important because employees look to management for guidance. The leader defines the boundaries for the team and created an atmosphere for building relationships and open communication. This in turn creates stronger teams. Team Building For managers who put his or her people first; they are more focused on nurturing and training. Research suggests leaders are more interested in mentoring and training their team rather than focusing on output of numbers or turn around time. This development in team building allows for Ã¢â¬Å"providing people opportunities to learn from their work rather than taking them away from their work to learnÃ¢â¬ (Hughes 2004, p. 4). A healthy culture inspires options and the innovations that grow out of creativity. Still one could not ignore times of fear. Management sometimes creates fear on purpose or misused it to work employees harder. This does not create positive outcomes but promoted conflict and an unstable team. It is clear for management to be successful; it must communicate its vision but also create positive reinforcement (See Figure 1. ). Once key members understand peopleÃ¢â¬â¢s needs, then action could be taken to improve managementÃ¢â¬â¢s role. Only then would a leader be taken seriously. Recognizing positive traits in a team member built trust, integrity and also met an important need while building a team.
Wednesday, July 17, 2019
One of the main(prenominal) themes of the fiction The Kite Runner Is buyback. through come to the fore the novel, the main character, amir, seeks buyback for his sins. amir states in the first chapter of the novel that he has a past of unat iodined sins. Throughout the novel, The Kite Runner, Khaled Hosseini uses the hobby symbols to express the theme of redemption The kale above emeers lip, the give birth and the black kite. The marker above ameers lip represents the redemption ameer attained by rescuing Sohrab.amir travels to Afghanistan to hand over Sohrab, who is organism exploited by a Taliban leader. The Taliban leader turns out to be an old adversary from ameers childhood, Assef. ameer must fight Assef in social club to leave with Sohrab. During the fight Amir is beaten brutally until Sohrab shoots Assef with his slingshot. Amir is go forth with a scar above his justifiedly lip, strikingly similar to the one Hassan had afterward having surgery for his cle ft lip. At the get down of the novel, Amir watches Hassan get raped, but he did not intervene.The guilt trip from that day pursues him throughout the novel. At one point, Amir flush tries to force Hassan to beat him up, as though the only thing that could redeem Amir was being beaten, but Hassan does not and Amir is even more ridden with guilt. When Rakim Khan calls amir, he says, Come, This is a chance for you to be groovy again. It is clear Rakim Khan understood the guilt that Amir was feeling, and realized that Amir had been peeping for redemption all his life. Khan new-made that rescuing Sohrab was the only way Amir could actually find redemption.The rescue of Sohrab, was the rescue of an frank, the rescue of a lamb. Throughout the novel, a reoccurring orbit of a sacrificial lamb represents a path to redemption. Amir shows the reader how during the Moslem holiday of Eid-Al-Ahda, the Mullah contributes a lamb. The seek on the lambs face during the sacrifice stays w ith Amir for the rest of his life. When Amir witnesses Asseff rape Hassan, he remarks, I caught a glimpse of his face. Saw the resignation in it. It was a look I had seen before. It was the look of the lamb.Once more in the novel, Amir is reminded of the lamb, when he witnesses Asseff exploit Sohrab. The link in the midst of Hassan, Sohrab and the Lamb is their innocence Because Amir betrayed an destitute Hassan, he must save an innocent to be redeemed, Sohrab is this innocent lamb. By remnant the exploitation of this figurative lamb, Amir attains redemption for his sin. Finally, returning with the blue kite was an avenue of redemption for Amir. Every winter, in Kabul, in that respect was a large kite-fighting tournament.The tournament was a big deal to the people of Kabul. Amir and Hassan won the tournament, but in order to truly be victorious, Hassan had to retrieve the blue kite so Amir could deal it home as a trophy. During the kite tournament Amir states, All i saw was th e blue kite. All i smelled was victory. Salvation. Redemption. Specifically, redemption in the eyes of Baba. Amir had stated earlier in the novel how he thought Baba thought of him as weak, but this was Amirs chance to be smashed in the eyes of Baba, and end Amirs craving for Babas love.In conclusion, the rescue of Sohrab, the sacrificial lamb and the blue kite represent redemption for Amirs sins. Redemption is a main theme of the novel, and Khaled Hosseini uses the aforementioned symbols to tell the story of Amirs prosecution for redemption. Amirs quest makes one question whether sometimes the sinner, is also the victim. As a mere child, Amir betrayed his friend, out of fear, out of cowardice, and out of selfishness, but he did not know that decision would haunt him for the rest of his life. Did he really be the punishment befallen on him?