Currency War Between China and Usa Essay Example for Free

Currency War Between China and Usa Essay Currency War: Currency war, also known as competitive devaluation, is a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a particular currency falls so too does the real price of exports from the country. Imports become more expensive too, so domestic industry, and thus employment, receives a boost in demand both at home and abroad. However, the price increase in imports can harm citizens purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries. Reasons of Currency War Between USA and China: Competitive devaluation has been rare through most of history as countries have generally preferred to maintain a high value for their currency,but it happens when devaluation occur. China keeps its dollar artificially low so that countries like the US will buy its goods. China is the USs largest trading partner and if they didnt sell their goods for super cheap, markets like India would be able to under cut the Chinese and then the US would buy goods from Indian instead of China. There is so much trade between China and the US that China profits immensely without needing its Yuan to appreciate. This of course hurts the average Chinese person in that their labour is devalued but it beneficial for the country as a whole as it has quickly become a super power economicaly. In 2008, a trader paid one Ghana Cedi for one U.S. dollar, but at the beginning of April 2012, the same trader travelling to Dubai paid GH ¢1.74 for one U.S. dollar. This means that year-on-year decline in the value of cedi against the US dollar was 74 per cent over a three-year period. A point to note is that during the global economic crises of 2008-2009, the cedi depreciated by 25 per cent against the dollar. Between 2010 and 2011, the cedi again depreciated 18.5 per cent against the US dollar. For last month, the cedi exchange rate depreciated 4.29 percent against the US dollar. So is the current downward slide in the cedi value as a result of the slowdown in the global economy or due to internal structural weaknesses? This question requires a detailed research work beyond the scope of this article but it is a very relevant question to ask at this time. In economics, depreciation is basically the symptoms of an underlying problem, specifically imbalances in the Balance of Payment (BOP), emanating from excess demand for dollars. So instead of discussing the depreciating cedi, I will rather focus my attention on the causes or factors that cause currency to depreciate and what the government can do to arrest this problem in special cases. Before then, I must let readers know the difference between currency fluctuation and depreciation. Fluctuations in currency value are a common event and are usually no cause for concern. The minor daily increases and decreases in value are generally due to â€Å"random walk† and not due to an economic event or fundamental problems. However, changes in currency value become significant when the decline in value of the currency is an ongoing trend. Technically, when currency depreciates, it loses value and purchasing power, with impact on the real sectors of the economy. Although, the economic effects of a lower cedi take time to happen, there are time lags between a change in the exchange rate and changes in commodity prices. Factors that determine the value of a currency include the current state of the overall economy, inflation, trade balance (the difference between the value of export and import), level of political stability, etc. Occasionally, external factors like currency speculations on the foreign exchange market can also contribute to depreciation of the local currency. Such being the case, a government can intervene into the foreign exchange market to support its national currency and suppress the process of depreciation. Currency depreciation can positively impact the overall economic development, though. It boosts competitiveness through lower export costs and secures more income from exported goods in a similar way devaluation does. On the contrary, depreciation makes imports more expensive and discourages purchases of imported goods stimulating demand for domestically manufactured goods. Globally, governments intentionally influence the value of their currency utilising the powerful tool of the base interest rates, which are usually set by the countrys central bank and this tool is often used to intentionally depreciate the currency rates to encourage exports. Factors that can cause a currency to depreciate are: Supply and Demand †¢ Just as with goods and services, the principles of supply and demand apply to the appreciation and depreciation of currency values. If a country injects new currency into its economy, it increases the money supply. When there is more money circulating in an economy, there is less demand. This depreciates the value of the currency. On the other hand, when there is a high domestic or foreign demand for a countrys currency, the currency appreciates in value. Inflation †¢ Inflation occurs when the general prices of goods and services in a country increase. Inflation causes the value of the cedi to depreciate, reducing purchasing power. If there is rampant inflation, then a currency will depreciate in value. What causes inflation? †¢ Printing Money. Note printing money does not always cause inflation. It will occur when the money supply is increased faster than the growth of real output. †¢ Note: the link between printing money and causing inflation is not straightforward. The money supply does not just depend on the amount the government prints. †¢ Large National Debt. To finance large national debts, governments often print money and this can cause inflation. Economic Outlook If a countrys economy is in a slow growth or recessionary phase, the value of their currency depreciates. The value of a countrys currency also depreciates if its major economic indicators like retail sales and Gross Domestic Product, or GDP, are declining. A high and/or rising unemployment rate can also depreciate currency value because it indicates an economic slowdown. If a countrys economy is in a strong growth period, the value of their currency appreciates. Trade Deficit A trade deficit occurs when the value of goods a country imports is more than the value of goods it exports. When the trade deficit of a country increases, the value of the domestic currency depreciates against the value of the currency of its trading partners. The demand for imports should fall as imports become more expensive. However, some imports are essential for production or cannot be made in the country and have an inelastic demand—we end up spending more on these when the exchange rate falls in value. This can cause the balance of payments to worsen in the short run (a process known as the J curve effect) Collapse of Confidence If there is a collapse of confidence in an economy or financial sector, this will lead to an outflow of currency as people do not want to risk losing their currency. Therefore, this causes an outflow of capital and depreciation in the exchange rate. Collapse in confidence can be due to political or economic factors. Price of Commodities if an economy depends on exports of raw materials, a fall in the price of this raw material can cause a fall in export revenue and depreciation in the exchange rate. For example, in 2011, a ton of cocoa sold for US4,000 per ton. Currently, it is going for US$2,300 per ton, translating into fewer inflows of dollars. Interest rate Differential I will use the International Fischer Effect to explain the relationship between the expected change in the current exchange rate between the cedi and the dollar, which is approximately equivalent to the difference between Ghana and US’ nominal interest rates for that time. For example, if the average interest rate in Ghana for 2011 was 24 per cent and for US was three per cent, then the dollar should appreciate roughly 21 per cent or the cedi must depreciate 21 per cent compared to the dollar to restore parity. The rationale for the IFE is that a country with a higher interest rate will also tend to have a higher inflation rate. This increased amount of inflation should cause the currency in the country with the high interest rate to depreciate against a country with lower interest rates. Market Speculations Market speculations can contribute to a process of spiraling depreciation after smaller market players decide to follow the example of the leading dealers, the so-called market makers, and after they lost confidence in a particular currency start to sell it in bulk amounts. Then only a quick reaction of the countrys central bank can restore the confidence of investors and stop the currency rates of the nations currency from continuous decline. When the currency depreciation is based on market speculations, in other words, not backed by fundamental economic factors, then the central bank comes to the rescue- intervene. A sterilised intervention against depreciation can only be effective in the medium term if the underlying cause behind the currencys loss of value can be addressed. If the cause was a speculative attack based on political uncertainty this can potentially be resolved. Because after a sterilised intervention the money supply remains unchanged at its high level, the locally available interest rates can still be relatively low, so the carry trade continues and if it still wants to prevent depreciation the central bank has to intervene again. This can only go on so long before the bank runs out of foreign currency reserves. In conclusion, currency depreciation is the result of fundamental deficiencies with the domestic economy which must be corrected over a period of time to restore balance. However, where the depreciation is out of speculative attacks on the currency, then the central bank can intervene to correct the temporary anomalies, which, often is short term in nature. Lastly, intervention in the foreign exchange market by the central bank to correct fundamental weaknesses, just like the Ghanaian situation will not work, because, very soon, the central bank will run out of international reserves; hence, the cedi must therefore seek its equilibrium level. The writer is an economic consultant and former Assistant Professor of Finance and Economics at Alabama State University. Montgomery, Alabama. Currency War in the Great Depression During the Great Depression of the 1930s, most countries abandoned the gold standard, resulting in currencies that no longer had intrinsic value. With widespread high unemployment, devaluations became common. Effectively, nations were competing to export unemployment, a policy that has frequently been described as beggar thy neighbour.[30] However, because the effects of a devaluation would soon be counteracted by a corresponding devaluation by trading partners, few nations would gain an enduring advantage. On the other hand, the fluctuations in exchange rates were often harmful for international traders, and global trade declined sharply as a result, hurting all economies. The exact starting date of the 1930s currency war is open to debate.[23] The three principal parties were Great Britain, France, and the United States. For most of the 1920s the three generally had coinciding interests, both the US and France supported Britains efforts to raise Sterlings value against market forces. Collaboration was aided by strong personal friendships among the nations central bankers, especially between Britains Montagu Norman and Americas Benjamin Strong until the latters early death in 1928. Soon after the Wall Street Crash of 1929, France lost faith in Sterling as a source of value and begun selling it heavily on the markets. From Britains perspective both France and the US were no longer playing by the rules of the gold standard. Instead of allowing gold inflows to increase their money supplies (which would have expanded those economies but reduced their trade surpluses) France and the US began sterilising the inflows, building up hoards of gold. These factors contributed to the Sterling crises of 1931; in September of that year Great Britain substantially devalued and took the pound off the gold standard. For several years after this global trade was disrupted by competitive devaluation. The currency war of the 1930s is generally considered to have ended with the Tripartite monetary agreement of 1936.

Pearl Buck: The Bridge Builder :: essays research papers fc

Pearl Buck: The Bridge Builder Humans fear and loathe that which they do not understand. This fact has been true for ages and still exists today. Fortunately, there are people such as Pearl Buck. People like her see the injustice in this simple fact and work to break down the walls of separation between other people. She took on the seemingly impossible task of building a â€Å"bridge† across the Pacific Ocean to China from America and broke down many walls through her writings, doing a great service to many. Biographical Information Pearl Sydenstricker Buck started her eventful life as Pearl Comfort Sydenstricker in Hillsboro, Virginia on June 26, 1892. Important events took place before this that made her birth even more special than a normal birth. Theodore Harris says that Buck’s mother Carie married a man named Andrew Sydenstricker, a Presbyterian missionary in China. The couple had a daughter and raised her there. When the child was four years old, she and her mother contracted cholera. Only the mother survived (18). Buck was born two years after this tragedy while the family was on hiatus from their mission work in China. When Buck was three months old, they returned to Chinkiang, China. According to Theodore Harris, Buck spent her whole childhood there with many Chinese influences. Wang Amah, a Chinese nurse, assisted her mother. She played with Chinese children and lived in a house along the Yangtze River (30-31). These influences later played an integral role in Buck’s success as a novelist. The Encyclopedia Britannica Online says Buck’s early schooling was received in Shanghai. Later, she returned to the United States and graduated from Randolph-Macon Woman's College in the year 1914. After graduation, Buck went back to China and became a college professor in Nanking (1). According to Dr. Bette Reagan, Pearl Comfort Sydenstricker married John Lossing Buck, also a missionary in China, and became known as Pearl Sydenstricker Buck. The ceremony took place in China in 1917. During their marriage, the couple had a daughter named Carol. While delivering the baby a uterine tumor was found in Buck, forcing her to have a hysterectomy. This left her with no possibility of bearing children again. To add to the pain of this blow, Buck later noticed that their only child was mentally retarded, suffering from a disease called PKU. The family decided to return to the United States to place Carol in a care facility in Vineland, New Jersey (1).

Contemporary Issue in Health and Social Care Essay

Introduction Social media has played and has been playing a crucial role in the development of health and social care in United Kingdom (UK). Since the emerge of the health and social care sector, social media has been performing a tremendous role as the health and social care is becoming an industry and without this industry social and economic development of UK would not be possible. This report covers the role of media for the development of health and social care. At the very beginning a snapshot of the role of media on the creation of public concern about health and social care will be discussed with evidence. The ways by which media publishes and considers about the health and social care issues will be discussed. Different perspectives of public issues regarding the health and social care will also be discussed in brief. The likely influence of different perspective on the development of service sector will also be discussed. Information relating to the health and social care that gives rise to issues of concern to the public 1.1 Information relating to health and social care to reach the public domain According to Cleland and Gareis (2006) health and social care sector is not only a sensitive one but also a crucial one for the public health. Normal people are much more concerned about the health and social care issues and almost all the time they had no information about health and social care. Mass media has come forward to solve the problem and they are almost fully successful in solving the problem regarding the information gap of the public. Side by side there are other different ways by which information relating to social and health care is transmitted to the public (Godden, 2014). Mass media like TV, Radio, newspaper, and the internet are to be attributed for the information dissemination. Besides the mass media, social media has also played a crucial role. Facebook, Twitter, and other social medi a have contributed a lot in this respect (Minniti and Moren, 2010). For example: If any new  vaccine related to Cancer is introduced, then mass media along with social media make a joint effort to disseminate the information to the cancer affected people all around UK. That is how information is disseminated about health and social issues. 1.2 Techniques to disseminate information relating to health and social care AJOL (2014) refers that dissemination of information related to health and social care is a sectorial policy taken by the UK government. There are some common methods by which health and social care information can be disseminated to the public and related parties. These most common methods are use of radios, pamphlets, television, and educational campaigns. Use of report cards and accreditation are two mechanisms that are most commonly used for the information dissemination related to the health and social care. UK citizens are very much concerned about their health and social care issues and they listen, understand, and take relative actions to apply this information for the effective and efficient health care sector (The Guardian. 2014). Use of pamphlets is one of the most effective ways to disseminate information. UK government and related ministry has also made it available through radios, televisions, and running campaigns which are educational (Minniti and Moren, 2010). For example Dissemination of information related to health and social cares is important for the education of the patients and citizens about the likely causes of Malaria and thus take strategic actions in this respect. 1.3 Ways in which information can influence the attitudes, thoughts, and behavior of people Information that is being provided are not made for something vain rather this information have a great influence on the attitudes thoughts, and behavior of the people of United Kingdom (UK). The evaluation of the information collected from different sources about health and social care and the influence of the information will be focused here (Ravasi and Schultz, 2006). Mass media has a strong liaison and this strong interpersonal relationship with different sources of information results in an unveiling of health and social care related information to the public. Common people are completely influenced by the information provided by the sources. As the sources of information has been int roduced in the previous section, it is state worthy that social and health care information has  changed the attitudes, thoughts, and behavior of common people. Mass media along with social media make people much more aware about their health and safety issues (Godden, 2014). For example: Before the invention of Facebook, any movement that had to be taken place faced great difficulty. But as Facebook grows and other mass media are getting concerned about the rights of them from the society, any nonviolent movement is taking place without such effort than previously had done (Mcclimens, et al, 2012). People are conscious about various contagious diseases and much more aware about their contribution to the society. They are also focused on their rights from the society. Their contribution to the society and the benefits they are deriving from the society are summed to take them to a balancing position or situation (AJOL, 2014). LO2 Understanding how issues of public concern related to health and social care are presented in the media 2.1 Ways in which media can be used to influence the attitudes and behavior of people in relation to health and social care issues Ravasi and Schultz(2006) Statesas it is mentioned in the previous section, mass media and social media in UK and perhaps all around the world is dedicated to the health and social care of the people. People’s attitude and behavior has changed and has been upgrading with the help of mass media especially in case of health and social care issues. Mass media is one of the main catalysts in the development of the positive attitudes and behaviors of the people. People are now much more aware of the use of social care services. They use child care services; they use more residential nursing care; they use residential care facilities and many more others (The Guardian. 2014). Conferencing is one of the ways by which mass media can be used for influencing people for their attitudes and behavior toward health and social care (The Guardian. 2014). Use of social media for the improvement of the awareness of the health and social care issues can be another way by which media can be used. For example Through different media advertising, many messages can be convened to the  public to change the attitudes about the health and social care. 2.2 Evaluation of the public assessment of the reliability and validity of media information about health and social care According to Hscic (2014) information that are being provided and published in mass media is not trustworthy always, so, the degree or magnitude of dependence on this information varies. Some media reports health and social care issues on behalf of government and they always praise the actions taken by government. Still some other media always make an evaluation of the actions taken by government in relation to health and social care issues and give their insightful recommendation. So, how people accept media information and, if accept, the degree of acceptance is a matter of great concern (Godden, 2014). People are very much concerned about the reliability and validity of the media information relating to the health and social care issues. Their dependence on the information is based on the transparency, honesty, and giving voice to the public. For example People will not be convinced if any mass media declares anything that is supernatural and about the health and social care issues. Different technical and business level factors are considered if any information is unveiled about health and social care (Csikaiand Bass2001). LO3 Being able to carry out research into different perspectives on a specific issue relating to health and social care 3.1 Research into different perspectives on a specific issue relating to health and social care According to BMJ (2014) there are many issues regarding the health and social care in United Kingdom (UK). These issues build up the different perspectives of health and social care issues. Different perspectives of the different issues of health and social sector will be discussed in this section of analysis. The most common and most influential issue of the health and social care is to meet the increased demand for services. Every government in the world has been tightening their budgets and the budget for health and social care has been decreasing at a slow pace (BMJ, 2014). One perspective of that issue of the health and social care is the budget restrictions. So, a little number of health and social care jobs are created. Another perspective is the increased number of private organizations in the social care sector like residential nursing, child day care, non-residential social care etc. (AJOL,  2014). Hardill et al (2005) States still another perspective is the less interesting issues to the students. As government makes less budget people are not so interested in developing their career in this sector. For example: It is difficult to secure a good job in the health and social care immediately after the graduation. So, employment opportunity is not created more than expected. 3.2 Monitoring of the changes of different perspectives regarding health and social care issues These different perspectives derived from the issues of health and social care have been changing with the passage of time. Change is a common phenomenon for every material of the world. So, perspectives regarding the health and social care have also been seeing a constant change as people’s attitudes, thoughts, and behaviors are changing. One issue of the health and social care is increased demand for services and different perspectives of the issue are the budget restrictions, lower employment opportunity, and uninteresting job to the graduates. These different issues have been changing with the passage of time in United Kingdom as well all around the world. One change is the increased demand for the social services. Peo ple are now most focused on the use of child day care and residential care facilities. Still another change is the emergence of the private sector in the health and social care sector (Hscic, 2014) For example People now are getting much busier and this leads to the increased demand for the social care services. Obviously, the standard of living has a positive correlation with the increased demand of the social care services. 3.3 Assessment of the relevance of the findings practically in the local arena UK has a strong health and social care sector and this sector has also been noticing a significant change as time passes. The local change in the perspectives of the issues of health and social care can also be attributed to the global change in the health and social sector (BMJ, 2014). The world’s health and social care has been seeing positive changes in recent years. Even in developed countries like India and Bangladesh, social and health care sector is about to boom. For example: In India, it is mandatory to make the life insurance at the very advent of  the birth of a child as like in the United States of America. UK is also monitoring a positive change in the health and social care sector and issues. In the local environment, people are also becoming much more aware about the services that can be expected from the government. Social care sector is observing a boom in the economy and the government is now transferring its duty to the private sector for the social services. The government is taking the position of monitoring the health and social care service institutions (Cleland and Gareis, 2006). 3.4 Factors that have influenced on the development of different perspectives According to Minniti and Moren (2010) various social and economic factors lead to the changes in the different perspectives of the issues of health and social sector. These social and economic issues affect the behavior of the people toward the development of the attitudes toward the health and social issues. Interpersonal relationship among the people also has an impact(Hscic, 2014). These factors that have a significant impact on the development of the different perspectives of the issues of the health and social sector are following here: There are different factors that lead to the development of different perspectives of the issues of the health and social care. These factors are: Life factors, environmental factors, socioeconomic factors, physical factors, social and political factors, lifestyle factors, emotional factors, etc. are different factors in the development of the different perspectives of health and social care. For example Genetic factors, physical factors, intellectual factors can be considered as factors under the life factors. The way of behaving and the cultural orientation of the society are also influential factors. These factors lead to the development of the issues of the health and social care and thus bringing changes in the community. LO4 Understanding the likely influence of different perspectives on the development of services 4.1 Analysis of the extent to which local attitudes reflect national level Local, local, and many other local attitudes make the national attitudes. So, within a country, like UK, there may have some dissimilarity among the attitudes of the people, as country is divided into many local areas and attitudes. Local attitudes make up the aggregate attitude which is national attitude. Local attitudes toward different issues and perspectives of health and  social care reflect the national level attitude. There is positive correlation between the development of local atti tude and national attitude (Cleland and Gareis, 2006) For example A survey is conducted by the NHS of UK with a question â€Å"Do you think that Britain’s health services are one of the best in the world?† 59% of the respondents replied positively whereas 33% disagree with the opinion and the remaining other said they don’t know (NHS. 2014). This example illustrates the national level attitude about the health and social care and it can be said that people are satisfied with what are being provided and the level of satisfaction is high. Health and social care sector is a sensitive sector as this sector is related to the life of the people. 4.2 Evaluation of the validity of public attitudes and behaviors in relation to a specific issue Public sometimes overact in different issues about health and social care. Their overreaction may lead to suspension of some good bills and at times which is catastrophic for the common people. In case of some specific issues public attitudes and behavior must have to be evaluated and the validity of their action will have to be measured (NHS. 2014). In the previous example it is clear that people are much more convinced about what they are getting from the government and public. Still some others reacted negatively and others made no comments on the issue. It is overreaction about the issue of health and social care. Peoples normally have positive experiences of the services being offered by NHS. NHS also makes direct communication and has strong media coverage. For example Mass media develops the public attitude toward the health and social care issues and an issue can be the â€Å"Satisfaction of the people services being offered by NHS† 26% people say that government has adopted right policies for the NHS whereas 44% says not. 54% people are satisfied with the national level services of NHS whereas 23% are not. 68% people are satisfied with the local NHS services (NHS. 2014). 4.3 Justification of the possible consequences of contemporary thinking for health and social care provision and services Csikai and Bass (2001)refers if people are not sophisticated enough and still remain in the Stone Age about the thinking of the health and social issues, these may lead to severe consequences. Thoughts which are  contemporary being replaced are by modern thoughts. One day, who knows, man would make it possible to invent the vaccines of AIDS. The most contemporary issues in the health and social care are the standards of the services in the hospitals especially for the elderly people or the senior citizens. Mass media can reflect the issues of the health and social care. One of the main consequences of the contemporary thinking about the health and social care is the education about the health and social care will be low. The contemporary attitude toward the health and social care may be catastrophic as people do not change their views about the medic and medicine as well as social services(Hscic, 2014) Conclusion There exists a positive relationship between public opinion of the issue and development of related social policy. Social media has played an important role in this regard as they are making the health and social care for the public a more interesting and concerning one. Social and health care has emerged as a prospective sector within UK and media has played a crucial role in the development of this industry. Mass media make the public aware of the need of the health and social care and health and social care is now an emerging sector in UK. The local health issues and attitudes contribute a lot to the international arena. Education of the people is important in this respect and different publication can be used for health and social care. References Online 1. NHS. (2014). Health Care in UK. Available: http://www.nhs.uk/Pages/HomePage.aspx. Last accessed 2nd March 2014. 2. The Guardian. (2014). the role of technology in integrating health and social care | live discussion. Available: http://www.theguardian.com/healthcare-network/2014/feb/26/technology-health-social-care-integration. Last accessed 2nd March 2014. 3. Godden, D. et. al. (2014). â€Å"Contemporary issues in rural health care† [online] available at: [accessed on 16th February, 2014] 4. AJOL, (2014). â€Å"The role of media in disseminating information† [online] available at: [accessed on 16th February, 2014] 5. Hscic, (2014). â€Å"Health and social care information center† [online] available at: [accessed on 16th February, 2014] 6. BMJ, (2014). â€Å"Reliability of health information for the public† [online] available at: < http://www.bmj.com/content/> [accessed on 16th February, 2014] Journals 1. Minniti, M. and Moren, L. (2010). â€Å"Entrepreneurial types and economic growth†, Journal of Business Venturing, 25 (3): 305-314. 2. Ravasi, D., Schultz, M. (2006), â€Å"Responding to organizational identity threats: exploring the role of organizational culture†, Academy of Management Journal, Vol.49, No.3, pp. 433–458. 3. Shane, S. and Venkataraman, S. (2000). â€Å"The Promise of Entrepreneurship as A Field of Research†, Academy of Management Review, 25(1), 217-226. Books 1. Cleland, D. I. Gareis, R. (2006). Global Project Management Handbook. â€Å"Chapter 1: â€Å"The evolution of project management†. McGraw-Hill Professional, 2006. ISBN 0-07-146045-4 2. Csikai, E. L. and Bass, K. 2001. Health care social workers’ views of ethical issues, practice, and policy in end-of-life care. Social Work in Health Care, 32 (2), pp. 1–22. 3. Hardill, I., Spradbery, J., Arnold-Boakes, J. and Marrugat, M. L. 2005. Severe health and social care issues among British migrants who retire to Spain. Ageing and Society, 25 (5), pp. 769–784. 4. Mcclimens, A., Bosworth, D., Brewster, J. and Nutting, C. 2012. Contemporary issues in the training of UK health and social care professionals—looking after people with a learning disability. Nurse education today, 32 (7), pp. 817–821.

Process Costing - 820 Words

Process costing Process costing is a system which mostly practices by a company whereby the manager of the company wants to know the cash flow from one department to another. Process costing give a clarify information to managers, therefore this activities is very important. Process costing is consisting of three ingredients which are direct materials, direct labor and manufacturing overhead. Direct material is the raw material which needs to produce a product, for example rubber for shoes, plastics for straws and etc. direct labor is a person who work and complete the product before it is completely produce. And manufacturing over head is about the indirect materials, indirect labor, and some indirect related to the factory. For†¦show more content†¦In a weighted average method the equivalent units of production for a department are the number of units transferred to the next department of finished goods plus the equivalent units in the department’s ending work in process inventory. First-in-First-out (FIFO) Method The computation of equivalent units under FIFO method differs from weighted average method in two ways. First the units transferred out figure are divided into two parts. One part consists of the units from beginning inventory that were completed and transferred out, and the other part consists of the units that were both started and completed during the current period. Second full consideration is given to the amount of work expended during the current period on units in the beginning work in process inventory as well as units the ending inventory. Thus, under the FIFO method, it is necessary to convert both beginning and ending inventories to an equivalent unit basis. For the beginning inventory, the equivalent units represent the work done to complete the units; for the ending inventory, the equivalent units represent the work done to bring the units to a stage of partial completion at the end of the period (the same as with the weighted average method). The formula for computing equivalent units of production is more complex under FIFO method than under weighted averageShow MoreRelatedJob Order Costing And Process Costing Essay1234 Words   |  5 PagesJob-order costing and process costing are two basic types of accouting systems. Costing systems provide cost data to help managers plan, direct and motivate, control, and make decisions (Garrison). These cost systems differ from entity to entity but most are based on one of the two. The costing systems can be seen and are explained in more depth in the following companies which each have different ways in which they produce products. Biolea is a family-owned/operated company specializing in theRead MoreProcess Costing1436 Words   |  6 PagesPAPER On Process Costing Submitted in fulfillment of the requirements for the 3rd SEM MBA Management Accounting and Control Systems Submitted to: Submitted by: Prof. G V M Sharma Vandana Rajput Dept. of MBA 1PB11MBA60 INTRODUCTION: Process costing is a form of operations costing which is used where standardized homogeneous goods are produced. This costing method is usedRead MoreProcess Costing1282 Words   |  6 PagesI. Discuss Process Costing, clearly bringing out its advantages and disadvantages. DEFINITION Costs are accumulated in costing systems. According to Glautier and Underdown (2001), the development of costing systems reflects the manner in which accounting methods have been adapted to the needs of different forms of activity and technology, and also to the appearance of advanced manufacturing techniques that have been a feature of recent years. Cost accounting systems allow full product costs toRead MoreProcess Costing1831 Words   |  8 PagesProcess Costing Vs. Job Order Costing Manufacturers use different types of costing systems to allocate production costs to their products and services. Two types of common product costing systems are process costing and job-order costing. While each system applies the same production costs to products, there are distinct variances in the application method. Process Costing o Process costing applies production costs to products based on the process they go through in the manufacturing process.Read MoreProcess Costing818 Words   |  4 PagesEXERCISE 3–1: Process Costing and Job-Order Costing [LO1] Which method of determining product costs, job-order costing or process costing, would be more appropriate in each of the following situations? * a. An Elmer’s glue factory. * b. A textbook publisher such as McGraw-Hill. * c. An Exxon oil refinery. * d. A facility that makes Minute Maid frozen orange juice. * e. A Scott paper mill. * f. A custom home builder. * g. A shop that customizes vans. * h. ARead MoreCars And Process Costing System928 Words   |  4 PagesPart 1: Vans and Process Costing System In manufacture, determining unit production cost plays an important role. Through a managerial cost system, managers use cost data to plan, control, and make decisions with the goal to gain the highest profit. Managerial cost system includes two common methods: process costing and job order costing. Job order cost is used to cost specific products or group of products whereas process costing is used for the mass production of similar products. Vans, a manufacturerRead MoreThe Costing Method Is An Accounting Process1134 Words   |  5 PagesA1. Costing Method Costing Method is an accounting process that assesses itemized input costs of production and fixed costs to determine overall costs of production. (Kucera, n.d.) Competition Bikes is performing this analysis so management can determine the optimum sales units to breakeven from its San Diego plant based on the current sales mix of 9 Titanium bicycles for every 5 CarbonLite bicycles produced. Traditional costing is an easily implemented costing method that aligns with generallyRead MoreJob Order and Process Costing Systems - Quiz Essay1908 Words   |  8 Pages  1. | Question : | (TCO F) Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is: | |    | Student Answer: | x | the same as the number of units put into production. |    | | | less than the number of units put into production. |    | | | the same as the number of units completed. |    | | |Read MoreAc552 W3 Lecture Process Costing Quiz706 Words   |  3 PagesTop That manufactures baseball-style hats. Material is introduced at the beginning of the process in the Cutting Department. Conversion costs are incurred (and allocated) uniformly throughout the process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Data for the Cutting Department for the month of February 2005 follow: Work in process, January 31-- 50,000 units 100% complete for direct materials, 40% completed for conversionRead MoreIntroduction. Muddled Is An Acfi2003 Student And As Many1398 Words   |  6 Pagesthe course including a fundamental principle, the differences in the costing systems and cost management systems. The purpose of this essay is help Muddled understand the fundamental costing principle that management systems should reflect the fact that different costs are relevant for different purposes, and how this principle affects the way that job costing and process costing systems are designed. Along the way several costing concepts will be explained and laid out for Muddled to understand in