ACC206 Week 3 Discussion 1 Issues in Costing Scored

Question: #493

Discussions

Issues in Costing

Describe three issues/problems that a company could encounter when trying to determine the actual cost of a good or service to be used in the cost of goods sold. For each of your issues, provide an example of a company or industry where these issues could be present.
Guided Response:
Review your peers’ posts and respond to at least two of your classmates. Describe how job order costing or activity-based costing could resolve the issues your classmates mentioned in their posts.

CVP and the Airline Industry

We’ve all experienced (or heard about) the challenges that the airlines have been facing. Read the Zacks Investment Research article, “Airline Industry Stock Outlook – August 2012.” Identify three factors that are affecting airline company’s ability to break even. For each of your factors, discuss how these have an impact on the breakeven (contribution margin, fixed costs, variable costs, a combination, etc.), and what happens if these factors increase or decrease.

Guided Response:
Review your peers’ posts and respond to at least two of your peers. In each response, add two factors that your classmate hasn’t included and explain how your additional factors influence the break-even point.

Solution: #512

ACC206 Week 3 Discussion 1 Issues in Costing Complete Solution

Break even is the point where the profit of the company is zero. The three major elements of the break even point are fixed cost, variable cost and selling price.
The three major factors that affected the airline industry was increasing fuel prices. With the increase in the fuel prices the variable and the running cost of the airline increased incredi...