Crunch the numbers

Abstract

The aim of this piece of study is to discuss full costing of the projects initiated by the company Wm Morrison Supermarkets PLC. The motive here is to provide a breakdown analysis of the company's total costs into fixed and variable costs. Moreover, the projection of these fixed and variable costs of the company for the next five years is also provided. Moreover, the operational structure of the organization is also highlighted in order to find out that all the operational activities of Wm Morrison Supermarkets PLC have been designed to perform at the lowest possible levels of costs or not.

Introduction

The function of costing is to help managers in getting the idea about the actual expenses of operations, processes, products, and departments which are the main foundation of budgets of the organizations. Moreover, these expenses also allow managers to analyze the ways in which their funds are being utilized for profits and to analyze any fluctuations in the business as well. In addition to this, cost accounting is also used for managerial accounting in order to help managers in justifying their ability to cut expenses of their company and ultimately to increase profits of their organization. Cost accounting has the dual function of providing information to both, the external and the internal users, without having the need of following accounting standards, as this field is more pragmatic.

The function of costing is to create a financial value of the production of an organization. Moreover, the historic trends of organizations are used in this context that allocate a company's fixed and variable costs over specific periods of time and create a total cost of production for the company. It also provides a clear insight about what product items are actually produced during that specific period of time. Thus, in this way, managers are then able to focus on the standard costing of their products and to focus on the result of each period of time.

Discussion

One of the most important parts of the management process of any organization is the process of cost accounting. It allows managers of the firm to determine and incorporate the best methods in order to increase company's profitability. By working closely on managing total costs of organization, this aspect allows managers to serve money for the firm in its future capital needs. Thus, one of the most necessary systems in the management of an organization's capital budgeting is its cost accounting, that provides all the relevant data for the purpose of analyzing fluctuations in the production expenses of that organization. In addition to this, cost accounting is one of the necessary tools in examining the company's performance, and reporting of company's performance needs to be done in a proper manner so that it would convey the original picture of company in financial market. False reporting of the company's performance can cause the stock market to balloon and result in rewarding stock to those companies who do not deserve it (Ilango, ...