product costing services

Good Essays
Chapter 1
Introduction

Background of the study
The tourism sector of the Philippines has been improving. Tourism industry boost in the trend of today’s generation that creates new opportunities in business world. The tourism industry is recognized by the government as an important contributor to the generation of foreign exchange earnings, investments, revenue, and employment and to the growth of the country output. The inclusion of tourism as a major pillar in the Medium Term Philippine Development Plan (MTPDP) has given priority to the tourism sector by promoting the Philippines as a premier tourist destination and investment site. If developed in a sustainable manner, indeed it can be a powerful economic growth engine for the country.
Travel Agency is one of the popular businesses in the tourism industry. A travel agency is a private retailer or public service that provides tourism related services to the public on behalf of suppliers such as airlines, car rentals, cruise lines, hotels, railways, and package tours. In addition to dealing with ordinary tourists most travel agencies have a separate department devoted to making travel arrangements for business travelers and some travel agencies specialize in commercial and business travel only. There are also travel agencies that serve as general sales agents for foreign travel companies, allowing them to have offices in countries other than where their headquarters are located.
The study focuses on how travel agencies cost the services they render. Product costing is the accounting process of determining all business expenses pertaining to the creation of company products. These costs can include raw material purchases, worker wages, production transportation costs and retail stocking fees. A company uses these overall costs to plan a variety of business strategies, including setting product prices and developing promotional campaigns. A company also uses product costing to find ways to streamline



Bibliography: Ask U. Ax Berguam, L-E Jonson, S. (1992). “Calculative Practice and Cost Accounting in Swedish Industry”. Cracknell D. and sempangi H. (2002). “Product Costing in Practice, The Experience of Microsave” Drury C. and Tayles M. (2005). “Product Costing In UK Organizations”. University of Huddersfield and Loughborough University Business School.

You May Also Find These Documents Helpful

  • Good Essays

    Two general approaches are used for costing products for the purpose of valuing inventories and cost of goods sold. One approach is called absorption costing. Absorption costing is generally used for external financial reports. The other approach called variable costing is preferred by some companies for internal decision making and must be used when an income statement is prepared in the contribution format. Ordinarily absorption costing and variable costing produce different figures for net income…

    • 542 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Product Costing

    • 3038 Words
    • 13 Pages

    Topic: Product costing Ningbo lecturer: Ms. Huang HuiQin – E: huanghuiqin@nbu.edu.cn – P: 86-574-87600960 Student: Lê Uyên Phương (Phoebe) – E: leuyenphuongvn@yahoo.com – P: 86-15 757 829 310 Student ID: 1211125031 NBU Intake 12, 2012 Required: Examine the literature to identify the different perspectives on how a product’s cost may be formulated. Assess the strengths and weaknesses of the various approaches to product costing that have been proposed…

    • 3038 Words
    • 13 Pages
    Good Essays
  • Good Essays

    Product Costing

    • 559 Words
    • 3 Pages

    Most manufacturers don’t have all the tools they need to reliably contain or reduce costs on products and projects. The key missing pieces typically include a view across the extended enterprise with multiple disciplines; a view of lifecycle costs, starting with design or project engineering and moving through supply, production, distribution, and, where relevant, aftermarket service; customer needs balanced with costs; forward-looking cost analysis; and a means of creating visibility and accountability…

    • 559 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Product Costing

    • 668 Words
    • 3 Pages

    Product costing assignment 1. (a) Split into fixed costs and variable costs, which are both allocated based on machine hours, but using separate rates. Also, make a distinction between the costs that are more directly related to the machines (e.g., depreciation, electricity) and those that have been allocated to the machines from other cost centers. (b) Split total machine-related costs into three types: costs related to setup, production, and maintenance of the machines. For each type of…

    • 668 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Products Costing System

    • 1686 Words
    • 7 Pages

    formal product costing system implemented in the company – with the exception of the calculation of product costs imperative for external financial reporting purposes, prepared by your company’s accountant. In order to reduce cost pressures upon Sunflower Ltd, in the highly competitive flower sector, this report recommends the introduction of management accounting into the company, in particular the use of product costing systems. The purpose of this report is to identify an appropriate product costing…

    • 1686 Words
    • 7 Pages
    Better Essays
  • Better Essays

    Product Costing System

    • 1565 Words
    • 7 Pages

    Product costing systems in modern manufacturing organisations Product costing refers to the process of assigning shared direct and indirect costs to individual products, customers, branches or other cost items. (USAID, 2007) Product costing is also referred to as assigning costs to inventory and production based on the expenses that go into producing or buying inventory. It is an important process for manufacturers that helps improves management information on products and helps managers and the…

    • 1565 Words
    • 7 Pages
    Better Essays
  • Satisfactory Essays

    Issues of Product Costing

    • 338 Words
    • 2 Pages

    http://www.writework.com/essay/issues-product-costing-unimportant-virtual-organisations-o Issues of product costing are unimportant for virtual organisations that outsource production operations." Essay by hotsanjaysoni, B-, March 2005 The topic states that is product costing important for virtual organisations that are outsourcing their production operations. Virtual organisations are those corporation that operate in the world of e-business or e-commerce. A virtual organisation can be defined…

    • 338 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Costing in Banking Service

    • 10495 Words
    • 42 Pages

    Journal of Money, Investment and Banking ISSN 1450-288X Issue 6 (2008) © EuroJournals Publishing, Inc. 2008 http://www.eurojournals.com/finance.htm Costing the Banking Services: A Management Accounting Approach Jordi Carenys Professor at the Management Control Department. EADA Business School EADA, c/o Aragó 204, 08011 Barcelona, Spain E-mail: jcarenys@eada.edu Tel: 934 520 844; Fax: 933 237 317 Web: www.eada.edu Xavier Sales Professor at the Management Control Department. EADA Business School…

    • 10495 Words
    • 42 Pages
    Powerful Essays
  • Satisfactory Essays

    Shared Service Costing

    • 554 Words
    • 3 Pages

    Shared Services Costing Solution Value Driver: Helps in identifying correct adoption of costing method which facilitates a transparent cost chargeback to Business Units (recipient of shared services) with granular insight of the cost constituents. Introduction: In today’s highly cost conscious environment, enterprise wide cost savings can be achieved by consolidating common work and infrastructure by using Shared Services units. But Business units often complain that Shared Services end up costing…

    • 554 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    & Service costing Service Costing Unit costing is the method of costing used when the cost units are identical. Identical cost units should have identical costs and this concept of equality of costs is the basic feature of unit costing. It may be noted that process costs, output costing and service costing are the sub-divisions of unit costing method. Service Costing – Nature and Problem: Service or operating cost is the cost of providing services. Service costing is the…

    • 1071 Words
    • 5 Pages
    Good Essays