Discussion (2x questions) and One Reply

Learning Goal: I’m working on a accounting discussion question and need an explanation and answer to help me learn.

1) Pick a company from each of these industries and create a list of costs using the uploaded files (cite & reference at the bottom). Explain how you allocated those costs.

-Pharmaceuticals

-Consumer Goods

-Automotive

Here is a helpful link on cost allocation. https://www.fool.com/the-blueprint/cost-allocation/ (Links to an external site.)

This video is a great explanation of the most common types of costs. https://www.youtube.com/watch?v=E7qWYu0xJfg (Links to an external site.)

2) What can you account for the differences? Reply to

“Phizer

Materials (Variable Cost), Wages based on Hours (Variable Cost), Marketing Cost based on sales (% commission) (Variable Cost), Testing / R&D (Fixed Cost), Rent (Fixed Cost), Salaries (Fixed Cost), Insurance, Banking, Legal Fees (Fixed Cost), Software & IT Services (Fixed Cost), Utilities (Variable Cost)

Nike

Materials (Variable Cost), Wages based on Hours (Variable Cost), Marketing Cost based on sales (% commission) (Variable Cost), R&D (Fixed Cost), Design (Fixed Cost), Rent (Fixed Cost), Athlete Endorsements (Fixed Cost), Salaries (Fixed Cost), Insurance, Banking, Legal Fees (Fixed Cost), Software & IT Services (Fixed Cost), Utilities (Variable Cost)

Tesla

Materials (Variable Cost), Wages based on Hours (Variable Cost), Marketing Cost based on sales (% commission) (Variable Cost), R&D (Fixed Cost), Design (Fixed Cost), Rent (Fixed Cost), Salaries (Fixed Cost), Insurance, Banking, Legal Fees (Fixed Cost), Software & IT Services (Fixed Cost),Utilities (Variable Cost)

I really just took a stab at this one. I wasn’t able to find specific lists of costs for these companies so I listed out what seemed reasonable based on the way the video outlined it. I used the link on cost allocation to try to allocate the costs as Direct (In Bold), Indirect (In Italics), or Overhead Costs (Underlined). I’m not sure if I’m on target with this submission or not, but I guess I’ll resubmit once I see what everyone else finds if I need to.

References

Girsch-Bock, M. (2020, August 13). What is cost allocation? (+ types of costs & examples). The Blueprint. Retrieved May 17, 2022, from https://www.fool.com/the-blueprint/cost-allocation/ (Links to an external site.)

(Links to an external site.)YouTube. (2016). Business Costs (Fixed Costs and variable Costs) Explained. YouTube.”