Cost Accounting Topics for Research Paper

Cost Accounting
Name
Institution
Introduction
Cost accounting is one of the three branches of accounting that deals with the determination of the costs of raw materials, products, processes, and projects, so as to report precise amounts on the financial statements. Cost accounting also helps the management in decision making, planning, and control of organizational resources. According to Horngren (2009), Cost Accounting is defined as a method of accounting whereby which all costs that have been incurred in conducting an activity, or better still for the purposes of accomplishing a purpose are collected, classified, and recorded. The data that have been gathered in then summarized and analyzed so as to arrive at an acceptable selling price or better still to determine where savings can be possible. In comparing cost accounting and financial accounting that largely considers money as a measure of economic performance, cost accounting considers money as a factor of production. Fundamentals of cost accounting provide necessary tools and concepts that are needed for businesses to successfully be competitive in the current global marketplace. It is also important to remember that most of the strengths and weaknesses of different methods that have been seen in practice that is related to valuation of inventory, cost analysis, and pricing of products are precisely identified and explained (Horngren et al., 2002).
This paper explores an advanced or deeper study of topics that are related to cost accounting such as Budget politics, Benchmarking, and Risk Management.
Cost Accounting and Budget Politics
In cost accounting, the budget is described as a financial plan that entails both of financial and non-financial information. Some of its most common features are about the projection of revenues and expenses. It is also important to remember that budget also entails non-financial information like how many employees that an organization requires. According to Norton &Elson (2002), the budget is defined as a forecasting document; however, businesses use it as a financial control tool for monitoring and evaluation of activities of the business. Financial control is a tool that is used in the business to review expenditure and also to ensure that management does not exceed the budgeted spending. More often than not, a company is not allowed to spend more than what has been budgeted for. It is also important to remember that budget is not only done by different businesses but also in the households and even for the entire country. Budgets are also supposed to cover a specific period and always it takes one year. During budgeting period, there are some politics that normally come up either within the company or within different departments of a given government. In budgetary politics, the real bottom line is about political judgment concerning political issues and other outcomes. During the budgetary process, the stakeholders that are involved in making budget would want to influence the process so as to favor them. This normally brings about a lot of politics among the people making the budget. More often than not, the budget serves as a tool that can be used for the deliverance of strategy mandates and also inspire the direction of the organization. In this way, there are many individuals that are involved in the process of creating budgets, and also in handling some financial evidence about decision-decision making procedure; these individuals are so careful when it comes towards protection of material that might end influencing the modest decision in any given manner. Schick (2008) posits that most of the budget managers or officers involved in budgeting would disrupt the determinations to make a budgetary process to be more transparent and clear to those who are in charge making the budget.
Due to politics that are normally being experienced in different organizations, these incidences have more than in one-way hampered budget-making process. In one way or the other, different departments would always try to unduly use their positions to try and determine the process for making a budget. There are instances when the managers would come with the idea that budget and those responsible in making decisions would always neglect enactment when they are coming up with final budget decisions that would be disregarded to the officers making the budget, or better still employees responsible for controlling operations in the field. For instance, the federal government of the United States, there has been a mandate the information of performance is used to inform the officials in that are charged with final budget decisions. However, there are also instances when the best business circumstances for expressing projected results or better still for connecting proposals regarding budgets to an organizations’ strategic plan could eventually be overlooked if there is any given budgetary that is thought as not being politically feasible. Nonetheless, the satire is that the role of different economical officers and also those responsible in running the program to work towards ensuring that there are transparency and accountability, geared towards diffusing the effect of gamesmanship, can lead these officials that are trying the idea of gamesmanship to engage into that game to their end. This normally occurs when the presentation information has been overlooked or has been reorganized due to the fact that it ensures there is no alignment to itself with what might be viewed as being politically viable for a specific institution (Elson, 2002).
The kind of system for budgeting assumed by any business group can be replicated by the type of preparation that has been put in place by the management. This is because whatever the focus that might be in the budget can only come out in the business plan. Therefore for the budget to be effective, then it is advisable that those who are involved in the process should not involve themselves in a lot of politics.
Benchmarking in Cost Accounting
Financial Benchmarking entails carrying out financial analysis as well as making a comparison of the results generated so as to...