Management - During Week 4 Assessment Answer

During week 4 you were asked to find a publicly traded manufacturing company. For our week six discussion board post I would like you to select the same company. Go to their website and read about their products and operations. Then in your post list five costs that the company would incur. Explain what type of cost behavior you believe would be appropriate for each of these cost items. Please be sure to include a link to the company’s website in your post. Week 4 discussion: Identifying the costing method in the Ford Motor The manufacturing company that has been chosen from the ASX list is Ford motors. The company manufactures car and car equipment. The company follows a static process to produce and manufacture their products. As the company follows a predetermined process to produce a bulk number of cars and produces a similar and identical units of products through employing a constant process, the process costing helps them to evaluate the cost of bulk production. (Ford Motor Companies, 2019).  Reason of selecting the process costing method This has been identified that the company would follow a process costing method as the company manufactures their product in bulk through following a stipulated process or a predetermined process with the knowledge of consumer’s need. As the job order costing method would not help in identifying cost or reducing the cost in bulk production process a process costing method has been applied in their manufacturing process. Through the process costing the manufacturing costs are assigned to the units produced. This method has been selected for the company as the company ascertains the cost of the product at each process or each manufacturing level. This method of costing has been applied to the company’s manufacturing process as this would help in reducing cost through producing in bulk. The company has suggested adopting the method as this method facilitates the company to produce the product in bulk and sell them in small units as per understating the order quantity. This reduces the carrying cost.  Along with that, the process costing helps the managers with the feedback which can compare similar product costs of the company from one month to the next month, keeping the cost in balance with the projected manufacturing budget. Further, this would help the company to trace and accumulate direct cost and allocate the indirect cost of the manufacturing process (Noe et al., 2017).