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Accounting Information System Simulation

359 words | 2 page(s)

One advantages of having a single person perform a number of tasks are that cost of labor gets reduced. Reduced cost of labor increases an organization’s profitability. When a single person performs multiple activities, the human labor is used to the maximum capacity. The skills and technical know-how of the person are utilized to the advantage of the company. In case of sensitive activities, it is important to rely on a single person to prevent leaking of information. Secrecy is guaranteed and if information leaks then one person is held liable. Performing multiple activities also increases a person diversity and knowledge.

The disadvantage of using a single person is that in the event of sickness or death then passing on relevant information can hit a snag. When a single person performs various activities, it makes that person lose focus of a single activity. Errors are bound to be made by that person especially when all the activities are demanding. The activities might be performed sub-standardly and because one person becomes less effective in trying to perfect all activities. Cases of fraud become difficult to uncover since the person can cover his tracks.

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Cost-benefit analysis involves the careful evaluation of cost factors that influence the operations of a business. When buying raw materials for a given process, consideration must be put in relation to quality and cost of the raw materials. High quality raw materials may be expensive than low quality materials. Sometimes the high quality material can be forfeited to minimize the cost of acquiring the materials. Accuracy of records is important in the determination of cost factors and a reflection of an organizations true financial status. Book keepers must endeavor to ensure that the records are true and up to date. Accuracy of records helps to carry out a cost benefit analysis. It is from records that decisions regarding cost effective measures are made.

Prioritization would help Ramos International deal with important matters at hand first. Prioritization minimizes cost of operations. The fundamental processes are carried out first then others follow. Prioritization is given to more profitable activities and less costly operations. In that manner, losses are mitigated.

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