Cost Accounting

Today, as the business world becomes more complicated than the past, galore(postnominal) internal accounting managers face with challenging situations. And situation same Kranbraek Corporation makes an internal accounting manager a severe decision between his professional ethics and accepting orders from his or her boss. What really matters is that this is violation of the professional codes of ethics, and it is discharge to end up with the collapse of the company.

        Cellant, who is the president of Kranbraik Corporation, has ordered the company¡¯s restraint to scrutinize all make ups that are currently assort as utmost make up and reclassify as many another(prenominal) as possible as product costs. It is meant to convert placed costs to variable one so that fixed cost that should be incurred this family can be portioned to next year. It sounds liable(p) to debit selling expenses as cost of goods sold which is going to be charged over the next year when the gross revenue amounts are quite high. However, the cost of goods sold next year are going to be higher than existent cost of goods sold, then the other aspects of the situation are going to casing the controller to cook the accounting books in other places. Reclassifying period costs to product costs will eventually and consecutively cause more problems later on.



Moreover, professional auditors will distrust why Kranbrack Corporation cutbacks period costs, and they will eventually predominate out that the company deceived stakeholders to look fabulous to potential investors by showing impressive earning per share. Finally, the later story implies an fatal disaster.

        Whether actual sales accounts don¡¯t exceed the planned amounts, it is ripe to cut back discretionary fixed costs give care advertizement and travel. However, nobody knows how adversely cutting back advertising expense affect is invisible and tremendous. Thus, the controller should not miss the importance...

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