Product costing - Week 4Product costing - Week 4From Chapter 10 complete question 3, page 382, on why product costing is different between financial and managerial accounting. What advantage does product costing offer over financial accounting? Illustrate its use by using a health care example. You must respond to at least two ofyour classmates' postings to receive full credit.How does product costing used in financial accounting different from product costing used in managerial accounting?Product Costing—“is the process of tracking and studying all the various expenses that are accrued in the production and sale of a product, from raw materials purchases to expenses associated with transporting the final product to retail establishments. It is widely regarded as an extremely important component in evaluating and planning overall business strategies. As John A. Lessner indicated in the Journal of Accountancy, "In today's hotly competitive business environment, accurate product costing has become critically important to a business's survival" (Anonymous, 2012). Managerial Accounting is “The process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals” (investopedia 2012). Financial accounting is “a specific type of accounting that is used by businesses to prepare reports on the finances of a firm for people outside of the organization, such as stockholders or government agencies. It is governed by specific accounting standards to insure uniformity in reporting” (Noffke, 2012). So how does product costing used in financial accounting different from product costing used in managerial accounting? “Managerial accounts use the income statement to explore cost behavior-- that is, whether costs are fixed or variable over the course of the accounting period. Financial accountants use the statement to show which costs are related to products. Knowing the difference between the statements can help you draft the statement you need for your specific analysis” (Freedman 2012). What advantage does product costing offer over financial accounting?“Product costing is the process of assigning costs to inventory and production based on the expenses that go into producing or buying inventory. It is an especially important process for manufacturers, and there are several potential costing methods that businesses choose for their simplicity, accuracy or other factors. If a business contracts out accounting services, the accounting firm may offer in-depth product costing analysis as part of its service. There are several benefits to such customized costing, such as, accuracy, project-tracking, decision-making, and project development” (Lacom 2012).Illustrate its use by using a healthcare example.An example using healthcare would have to be, that the company makes sure that they use their managerial accounting first. “The process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals”(investopedia 2012). They would have to identify what is needed for the facility, measure (inventory) of what is needed, analyze and interpret the cost of the supplies needed, and communicate amongst the other representatives in the management staff, with the goal of keeping spending down.Second, they have to use their Product Costing which “is the process of tracking and studying all the various expenses that are accrued in the production and sale of a product, from raw materials purchases to expenses associated with transporting the final product to retail establishments” 9(Anonymous, 2012). In this case, finding the right places that supply the supplies that are needed and at what cost it will be for the facility.9 Deciding how much is used of what and the expenses of how to get the product. Finally, they would have to make sure they use the financial accounting, which is “a specific type of accounting that is used by businesses to prepare reports on the finances of a firm for people outside of the organization, such as stockholders or government agencies. It is governed by specific accounting standards to insure uniformity in reporting” (Noffke, 2012). Keeping track of what is being spent and what supplies are being ordered.9 Making sure your reports are up to date can help the facility from having problems later.999References:9Anonymous, (2012).9 Product Costing.9 Retrieved from www.referenceforbusiness.com/small/Op-Qu/Product-Costing.html Freedman, J, (2012).9 Product Costing Financial Statement V’s. Managerial Accounting.9 Retrieved from: www.ehow.com/info_8653556_product-statement-vs-managerial-accounting.html Investopedia, (2012).9 Managerial Accounting. Retrieved from: http://www.investopedia.com/terms/m/managerialaccounting.asp#axzz2Ez8fsrSe9Locoma, T., (2012).9 The Advantages Product Costing Offers in Financial Accounting.9 Retrieved from: http://smallbusiness.chron.com/advantages-product-costing-offers-financial-accounting-24883.html9Noffke, D., (2012).9 What is financial accounting?9 Retrieved from: