BUSINESS AND MANAGEMENT

Financial statement of Apple (Apple.com) and Google (Google.com)

1. Identify at least two activities at Apple and Google that cause costs to be incurred. Do you believe these companies should be concerned about controlling costs of the activities you identified? Explain.

The main activities that cause costs to be incurred by the two companies include manufacturing, managing expenses, the division of labor, research, advertisement, and so on (Jackson et al, 2008). Regardless of that, these companies should be concerned about controlling costs of such activities because cost control or just cost management is perceived as being an important cost accounting system which is based on the common objective of fostering the cost-efficiency of the business through reducing costs or limiting their growth rate.

Moreover, due to the fact that majority of the business organizations make us of the cost control techniques in achieving the set objectives of their enterprises, these companies should be concerned with such costs so as to ensure that they in the position of monitoring, evaluating and eventually enhancing the efficiency of certain areas, for instance, product lines, divisions or departments, with their operations. Since cost control mechanisms usually enable a corporation to be able to achieve greater profit returns as compared to its competitors, to these companies this will remain to be a continuous process which ought to commence with a future annual budget (Drury, 2004). By doing so, it means that it will be easier to coordinate and organize production, selling, distribution, and their administration functions. Thus, in the long-run both of the companies will end up making maximum advantages of the available opportunities. 
2. Would you classify Apple and Google as service, merchandising, or manufacturing companies? Explain.

Apple and Google can be classified as manufacturing and service companies. The major reason for that is because Apple develops designs as well as sells computer software i.e. OSX and iOS operating systems, consumer electronics- I.e.  IPhone smartphones, and online services i.e. iCloud and iOS App Store (Lüsted, 2012). On the other hand, Google company majorly specializes in internet related services and other products which include things like cloud computing, search, software and online advertising technologies (Nehls, 2011).

3. Is activity-based costing useful for companies such as Apple and Google? Explain.

Yes. The reason for that is due to that fact that it is an essential tool for these companies since they offer customized products and services. Typically, such a customized production environment for these companies needs the allocation of the actual indirect expenses to the products or services so as to identify its true expenses incurred. As much as costs are to be allocated per service or product; a clear picture will start to come into view regarding the performance of these businesses or the areas which need to be improved (Emblemsvåg & Bras, 2001). 

In addition to that, activity-based costing is useful for companies such as Apple and Google since it is the one which will aid in justifying and evaluating the companies’ investments in new technologies, improving the quality of their products or services through better product or service and design, and coping or increasing the level of competition in their industry (Emblemsvåg & Bras, 2001). Nevertheless, this means that it make it effective in identifying any non-valued added activities hence helping in efficiently allocating resources to profitable activities.

Because of that, there will be the provision of behavioral incentives via the creation of cost consciousness amongst workers, responding to any increased overheads or pressure from regulators.  This is what will add value to such enterprises for continuous improvement.

 

 

References

Jackson, S., Sawyers, R., & Jenkins, J. G. (2008). Managerial accounting: A focus on ethical decision making. Mason, OH: Thomson/South-Western.

Drury, C. (2004). Management and cost accounting. London: Thomson Learning.

Nehls, E. F. (2011). Business analysis project on google inc. Place of publication not identified: Grin Verlag Ohg.

Emblemsvåg, J., & Bras, B. (2001). Activity-Based Cost and Environmental Management: A Different Approach to ISO 14000 Compliance. Boston, MA: Springer US.

Lüsted, M. A. (2012). Apple: The company and its visionary founder, Steve Jobs. Minneapolis, MN: ABDO Pub.