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Pages:
2 pages/β‰ˆ550 words
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1 Source
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
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MS Word
Date:
Total cost:
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Topic:

Costing Methods Used By Walmart

Essay Instructions:

Overview
Companies choose their costing method based on their business activities and processes, as well as the products and services they offer. A company can be a manufacturing, merchandising, or service organization; this also impacts which costing method will be most useful for its purposes. As a part of costing, the company also needs to decide how to classify overhead costs using either traditional or activity-based costing (ABC).
In this written assignment, you will choose a company, consider its business and costing requirements, and recommend a costing system that will work best for the business.
Prompt
Think about a company you know. This could be a current or past employer or a company you admire. Consider its business activities and the type of products and services offered. Based on what you have learned so far, write a short paper that reflects on the different costing methods and speculates on how they might apply to your selected company.
Specifically, you must address the following rubric criteria:
Company Overview: Identify the company you selected and provide a brief overview of its business.
Is it a manufacturing, merchandising, or service organization?
Costing Methods: Compare the job order and process costing methods, and explain how each of these can be applied to the company.
How could the costs differ if one method is chosen over the other?
Factory Overhead: Outline possible indirect or overhead costs the company may need to account for, and identify the type of costing the company might use for these costs.
If the company decides to use activity-based costing (ABC), what are some activity bases (cost drivers) it might use to allocate these costs?
Recommendation: Based on your analysis, recommend a costing method for the company, and explain why you think this method will work best for the business.

Essay Sample Content Preview:

Walmart Costing
Name
Instructor
Institution
Date
Company Overview
Walmart is one of the world's biggest stores in size and portfolio. It is based in Bentonville, Arkansas, in the United States (Smith, 2019). It is a merchandising company. Walmart tends to dominate new markets through low-risk entry approaches due to severe rivalry and other considerations such as safety, cost, and innovation. It is a chain of supermarkets, hypermarkets, departmental and discount stores, and community markets (Huo, 2021). The company has a supply chain that stretches out across the world with various markets worldwide. It has a great and diverse workforce, which needs to be appropriately managed. The company, therefore, has several order processing strategies that need a keen and deep analysis.
To ensure a timely and efficient running of the business, Walmart has order fillers that oversee completing consumer requests (Basu & Banerjee, 2021). Order fillers pull commodities from the inventory and package them in bags or other carriers. They work efficiently to guarantee prompt delivery of customer orders at the stipulated times. It integrates technology to ensure that the entire process is highly automated. The high automation minimizes errors and increases the efficiency of running out the orders. The company then sells its products based on e-commerce, from the U.S. to other countries worldwide.
Costing Methods
In measuring its liquidity and profitability, the accounting system for Walmart Inc should focus on managing its costs and inventory. Different costing methods can reduce the inventory costs and keep accurate commodity costs for Walmart Inc. A Job Order Cost Accounting System is utilized when a company makes products that are tailored to customer specifications (Pollard, 2018). Each customer request is usually taken as a job or a task that has to be executed independently. The order is then tracked systematically up to completion. This type of costing is usually applicable to real estate and medical companies. On the other hand, process costing addresses the costs involved in the production and supply of almost identical products. It is used when ...
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