Research Report - Esprit Holdings (Management Accounting) Essay

Research Report - Esprit Holdings (Management Accounting) - Essay Example We consider the lifestyle and home division to analyze the costing method that is used in this division. This division produces such products as jewels, eye wear, umbrellas, baby carriage, toys and stationery. The most appropriate costing method used in this division is the job costing method, this is due to the fact that each of the above named products produced undergo different activities to achieve the quality and product desired. For example the activities involved in making of jewels are different from the activities involved in the making of toys, for this reason therefore the most appropriate method is the job order costing method that allocates appropriate overheads to the products produced. In the production of lifestyle and home products a number of department are involved, these include the production departments and the support departments. Production departments include the manufacturing department and the quality control department. Support departments include the human resource department, the administration department and the marketing and sales department. These entire departments are important in the smooth running of the company. All companies have costs that are incurred in the production of products, the lifestyle and home division has these costs which include the variable and overhead costs. Some of the major costs include electricity and power costs which are incurred through lighting and the running of machinery in the manufacturing department. The other cost is labor cost which includes direct and indirect labor costs; the production process requires labor while indirect labor costs are evident from the administration and human resource department. Material cost is also a cost incurred by the division and the material costs depend on the product being produced, example material used to make jewels are more expensive than he