Many service industries link labor rate and time (quantity) standards with their processes. One example is the standard time to board an aircraft. The reason time plays such an important role in the service industry is that it is viewed as a competitive advantage: best service in the shortest amount of time. Although the labor rate component is difficult to observe, the time component of a service delivery standard is often readily apparent—for example, “Lunch will be served in less than five minutes, or it is free.” Required Break into teams and select two service industries for your analysis. Identify and describe all the time elements each industry uses to create a competitive advantage.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Many service industries link labor rate and time (quantity) standards with their processes. One
example is the standard time to board an aircraft. The reason time plays such an important role in the service
industry is that it is viewed as a competitive advantage: best service in the shortest amount of time.
Although the labor rate component is difficult to observe, the time component of a service delivery standard
is often readily apparent—for example, “Lunch will be served in less than five minutes, or it is free.”
Required
Break into teams and select two service industries for your analysis. Identify and describe all the time elements
each industry uses to create a competitive advantage.
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