Preview

Diss Questions

Good Essays
Open Document
Open Document
1145 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Diss Questions
Prompt 1
Perform an Internet search using the phrase “reducing overhead costs”. Select and read a case study or article from the results of your search. (Make sure that you do not select an instructor 's lecture notes or a class assignment from the results of your search.) Summarize the case study or article, and relate the ideas of the article to what you have learned this week in this course.

Overhead Costs are “An accounting term that refers to all ongoing business expenses not including or related to direct labor, direct materials or third-party expenses that are billed directly to customers. Overhead must be paid for on an ongoing basis, regardless of whether a company is doing a high or low volume of business. It is important not just for budgeting purposes, but for determining how much a company must charge for its products or services to make a profit.”(Investopedia, 2013)
According to Deena Kaye, of Lyons Solutions reducing overhead costs can be simple. She says that “Reducing overhead costs by 10% could yield your business a 20% increase in net profit. You would need a 20% increase in sales revenue to net the same profit. (Only assuming overhead rises exactly with revenue). And, it’s one of the fastest and easiest ways to improve earnings because every dollar saved goes straight to the bottom line. Particularly in a sluggish economy when increasing profits through sales and price hikes proves to be more challenging.” (Kaye, 2010)
There are five areas that should be focused on to help reduce overhead. The five areas are 1. “Insurances 2. Logistics 3. Supplies 4. Services 5. Telecoms and IT “(Kaye, 2010)

Once these areas have been looked at there are seven steps that need to be completed in order to reduce the costs. The seven steps are
“Step 1 - Analyze Spending Patterns

Step 2 - Conduct Needs Analysis

Step 3 - Gather Market and Competitive Knowledge

Step 4 - Solicit Suggestions

Step 5 - Write a Request for



References: Business Dictionary (2013). Standard Cost Retrieved on May 4, 2013 from, http://www.businessdictionary.com/definition/standard-cost.html Noreen, E., Brewer, P., Garrison, R. (2011). Managerial Accounting for Managers Retrieved on May 4, 2013 from, http://digitalbookshelf.southuniversity.edu

You May Also Find These Documents Helpful

  • Satisfactory Essays

    The buedgeted overhead rate is based on the estimates that the company makes at the beginning of the year. Remember, overhead rate = total cost / total cost driver. In this case, the cost driver is machine hours. Therefore, our equation for overhead rate is:…

    • 391 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    RSM222 Midterm

    • 1583 Words
    • 9 Pages

    2. At the end of a period, after overhead has been applied to all jobs, manufacturing overhead has a credit balance of $900. We say that overhead is:…

    • 1583 Words
    • 9 Pages
    Good Essays
  • Better Essays

    plans in place to keep cost down. Some of the ways in which this can be achieved are as…

    • 1264 Words
    • 6 Pages
    Better Essays
  • Good Essays

    Hsm/220 Week 3

    • 491 Words
    • 2 Pages

    • Overhead or Indirect costs: Most budgets include overhead expenses (also called indirect costs), which allow the project to bear a portion of the administrative costs of the day-to-day operation.…

    • 491 Words
    • 2 Pages
    Good Essays
  • Good Essays

    BUS 475 Final Exam

    • 1852 Words
    • 7 Pages

    1) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?…

    • 1852 Words
    • 7 Pages
    Good Essays
  • Good Essays

    Maxine Doc 315

    • 856 Words
    • 3 Pages

    Overhead costs consists of all the company’s general operating expenses. General and administrative costs (G&A costs) cover expenses such as…

    • 856 Words
    • 3 Pages
    Good Essays
  • Good Essays

    JET2 Task 4

    • 1491 Words
    • 6 Pages

    This volume metric, however, is not the driving factor for manufacturing overhead expenses in fact this method is designed more for departmental focus. It can also be very inaccurate as there is little to no relations between the actual costs and the activity these costs are being signed to. This method often causes inaccuracies. It is in the company’s best interest to switch, as many companies are doing, to an activity-based costing system.…

    • 1491 Words
    • 6 Pages
    Good Essays
  • Good Essays

    The budding entrepreneur juggling limited funds stretched way too thinly in an effort to achieve the envisioned goal. Or even the seasoned senior manager who has identified an opportunity to streamline operations while still increasing productivity and profitability. Every organization at some point or several points explores various strategies for cost reduction.…

    • 1047 Words
    • 5 Pages
    Good Essays
  • Good Essays

    2) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?…

    • 2340 Words
    • 10 Pages
    Good Essays
  • Good Essays

    Cost and Overhead Costs

    • 282 Words
    • 2 Pages

    1. Calculate the plant-wide overhead rate. Use this rate to assign overhead costs to products and calculate the profitability of the four products. The assignment spreadsheet provides a starting point for your calculations, with some data formulas already supplied.…

    • 282 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Mile High Cycle Essay

    • 447 Words
    • 2 Pages

    1) Determine the direct costs and overhead variances. What might be causing each of the variances to occur?…

    • 447 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Week 3 Acct2522

    • 1205 Words
    • 5 Pages

    TOPIC 3 COST BASICS After completing this topic, you should be able to: 1. 2. 3. 4. 5. 6. 7. 8. Why are costs important? What does ‘different costs for different purposes’ mean? Understand and apply various classifications of costs. Understand cost drivers and the role of cost driver analysis. Describe and apply the activity hierarchy of costs and cost drivers. Explain the relationships between cost estimation, cost behaviour and cost prediction. Understand and apply various methods for cost estimation. Understand some practical issues faced in estimating cost functions.…

    • 1205 Words
    • 5 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Week 3 Reflection

    • 351 Words
    • 2 Pages

    Identify an organization not previously selected and recommend methods to reduce costs. What effects do technologies have on costs? What are some lower-cost sources the organization can utilize to reduce costs? What considerations might cause a profit-maximizing firm to decide to forgo using lower-cost sources?…

    • 351 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    assessment 1

    • 3672 Words
    • 15 Pages

    Some of the actions that should be completed during each phase of the restructure/downsizing include:…

    • 3672 Words
    • 15 Pages
    Powerful Essays