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Management Accounting Sample - Assignment Prime Australia

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Management Accounting Sample - Assignment Prime Australia

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  1. MANAGEMENT ACCOUNTING TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  2. Table of Contents INTRODUCTION .........................................................................................................................................................3 TASK 1...........................................................................................................................................................................3 P1.1 Classification of different types of cost ...........................................................................................................3 P 1.2 Computation of unit cost by using unit costing method...................................................................................4 P 1.3 Cost of exquisite using absorption cost............................................................................................................5 P 1.4 Cost data of exquisite using appropriate techniques........................................................................................6 TASK 2...........................................................................................................................................................................7 P 2.1 Preparation and analysis of cost report for the month of September and variance analysis ...........................7 P 2.2 Various areas of potential improvements using performance indicators .........................................................8 P 2.3 Ways to reduce cost and enhancing value and quality .....................................................................................9 TASK 3...........................................................................................................................................................................9 P3.1 Purpose and nature of the budgeting process to the budget holders of Jeffery and Son’s Ltd..........................9 P 3.2 Use of appropriate budgeting technique.........................................................................................................11 P 3.3 Preparation of production and material budgets ............................................................................................11 P 3.4 Preparation of cash Budget ............................................................................................................................12 TASK 4.........................................................................................................................................................................14 P 4.1 Calculation of variances, identify possible causes and recommend corrective actions.................................14 P 4.2 Operating statements includes both budgeted and actual results...................................................................16 P4.3 Responsibility centers......................................................................................................................................17 CONCLUSION ...........................................................................................................................................................17 REFERENCES ............................................................................................................................................................18 Appendix .....................................................................................................................................................................20 Working notes for task 1.3.......................................................................................................................................20 Working notes for task 3.1.......................................................................................................................................23 TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  3. THIS IS A SAMPLE ASSIGNMENT BUY COMPLETE ASSIGNMENT TO SCORE A+ GRADE CONTACT OUR EXPERTS TOLL-FREE NO: +61 879057034 WHATSAPP NO: +61 424715655 EMAIL: help@assignmentprime.com WEBSITE: https://www.assignmentprime.com TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  4. INTRODUCTION Management accounting, in general words, is referred to as the provision of financial data which is further used to make decision, on behalf of an organization and its business development. Accounting information is used by the managers for deciding the financial matters of company as well as to manage and control business functions (Drury, 2008). From a long run, this tool is considered to be the important for solving the financial matters of a business entity. The present report is going to explain about the different types of cost classification as well as calculations of unit cost. This report is focused towards the case of Jeffrey and Son’s manufacturing company. Furthermore, calculation of cost is done exquisitely while using absorption costing technique. The other sections show the cost report which is prepared with respect of manufacturing unit. Along with this, a specific consideration is given to performance indicators for recommending the ways to improve financial positions. This unit also aims to find the areas of improvements within the accounting systems. However, the major purpose of budgeting as well as its process is explained in context to Jeffery and Son’s Ltd. At last, the causes of negative variance are identified while recommending the ways to improve the budgetary position of company. TASK 1 P1.1 Classification of different types of cost There are various kinds of expenses that are incurred by manufacturing unit when producing goods and services. These all operating cost is generally refereed as “Cost”. It is further classified into range of categories that are based upon functions, behaviors, nature of expenses etc (Backer, 2004. ). This section is going to describe the nature of expenses as well as the classification of various kinds of cost: Different elements of cost: There are three major elements of cost i.e. material, labor and expenses. Use of material is essential for the purpose of manufacturing finished goods. On the other hand, labor cost is associated with the expense made on human resource which is involved in production process. However, all other expenses incurred during the production of goods and services are known as elements of cost. All such expenses are further divided into two categories such as direct and indirect variety i.e. direct labor and indirect material, etc Nature of Expense: Material, labor and expenses are the three major categories of cost which are involved in a production process. Manufacturing companies are witnessed with paying remuneration to workforce. For successful completion of manufacturing process, the company is required to have skilled human resources or labors. Thus, salaries and wages that are paid to such workforce are known as “Labor cost”. The specific cost which is paid against the purchasing of raw material is considered to be “Material cost”. The other category of expenditure is further known as expenses for a production unit (Griffith, Stephenson and Watson, 2014). Functions/Activities: Within manufacturing organizations, one can find different departments which pay consideration to certain functions. Hence, all the departments incur their individual cost. It is incurred by different departments as per their functions that are generally known as expenses to respective departments (Drury, 2008). As per the functions of various departments, the cost is classified into TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  5. Manufacturing cost, Selling cost, Administration and Distribution cost, Marketing cost and Research and development cost. Behavior of Cost: The behavior of cost is to be decided as per the volume of production. In other words, the cost which is based on the volume/units of production is generally known as behavioral cost. The production volume of company depends upon the market demand as well as other factors. There are three major types of cost that are classified as per behavior i.e. Fixed cost, Variable cost and Semi variable cost. The cost which does not change at any level of production is called as fixed cost (Mistry, Sharma and Low,2014. ). However, the cost remains same at every level of production, else whatever the production is at any point. The fixed cost includes: rent, transportation. Variable cost, on the other hand, includes expenses that changes as per the production level. The single alteration is production units that lead to change in cost of production. Semi-variable cost is the combination of both kinds of costs including fixed as well as variable (Backer, 2004). In other words, it is the cost which remains same at a specific level of production. However, it changes after certain limit and hence is called as semi variable cost. P 1.2 Computation of unit cost by using unit costing method Job costing method is the most famous method of calculating cost for a job that is of unique nature. This method is applied to the business manufactures specific types of goods and services and where the job is performed as per specific requirements of consumers/clients. Job costing method allows manufactures make consideration towards direct and indirect cost of a job (Method of costing. 2014). The following points represents the calculation of per unit cost of job 444 for Jeffrey and Son’s manufacturing Ltd: Calculation of cost and unit cost of Job 444 Particulars Direct cost Direct material Direct labour Indirect cost Variable production overhead Amount (£) 200 270 180 Fixed production overhead Cost per unit Units to be produced Total cost 770*200 120 770 200 154000 Working note Fixed production overhead= (Budgeted overhead / total direct labor hours) * Direct labor hours for Job 444 =(£80000 / 20000 hours) * 30 hours =£120 The above calculation represents that total cost of job 444 is £770, to the flip side, per unit cost of job 444 is identified to be £3.85. TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  6. P 1.3 Cost of exquisite using absorption cost Production Departments Service Department Basis of Apportioning Total Machine Shop X Machine Shop Y Assembly Stores Maintenance 000’s Indirect Allocated 362 100,000 99,500 92,500 10,000 60,000 Wages Indirect Area 253 100,000 100,000 40,000 4,000 9,000 Materials occupied Lighting & Area 50 10,000 5,000 15,000 15,000 5,000 Heating Occupied Rent Area 100 20,000 10,000 30,000 30,000 10,000 Occupied Insurance & Book value 15 7,947 4,967 993 497 596 Machinery of Machinery Depreciation Book value 150 79,470 49,669 9,934 4,967 5,960 of Machinery of Machinery Insurance of Area 25 5,000 2,500 7,500 2,500 Building Occupied 7,500 Salaries of No. of 80 24,000 16,000 24,000 8,000 8,000 Works employees Mgmt. Sub Totals Re- 1,035 346,417 287,636 219,927 79,964 101,056 of service Stores Dept. Maintenance Totals 39,982 48,507 434,906 29,987 32,338 349,961 9,995 20,211 250,133 (79,964) (101,056) 0 0 P 1.4 Cost data of exquisite using appropriate techniques Calculation of absorption rate on the basis of labor hours TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  7. Machinery X Machinery Y Assembly 434908/200000= 2.17 349960/150000= 2.33 250134/20000= 2.15 Calculation of Exquisite £ £ Materials 8 Labour 15 Overheads X (2*2.17) 4.34 Y (1.5*2.33) 3.5 Assembly (1*1.25) 1.25 Total cost 32.09 Fort calculating the cost of Exquisite. The changes held in absorption rate from machine hour to labour hour are being considered. This was noticed that, it puts significant changes in actual cost of exquisite. From the calculation, it can be said that labour hours method is the best for assessing final cost of Exquisite. The total cost identified is £32.09. TASK 2 P 2.1 Preparation and analysis of cost report for the month of September and variance analysis Cost report for the month of September Budgeted cost Actual cost Variances Particulars Units Material cost Labor cost Fixed overhead Prime cost Electricity Fixed portion Variable portion Maintenance Total production cost 2000 units 24000 18000 15000 57000 1900 units 22800 19000 15000 56800 -1200 1000 - - 500 7500 5000 70000 500 7125 5000 69425 - 375 - Calculation of standard budget at 1900 units Budgeted cost Budgeted cost Particulars Units Material cost Labor cost Fixed overhead 2000 units 24000 18000 15000 1900 units 22800 17100 15000 TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  8. Prime cost Electricity Fixed portion Variable portion Maintenance Total production cost 57000 54900 500 7500 5000 70000 500 7125 5000 67525 Calculation of variable cost – electricity = change in total cost / change in no of units to be produced = (8000-5000) (2000-1200) = £3.75 This was found that cost of production is not changed as after occurrence of slot of 500 and the increase of production units up to 100 will not make huge change. Variance analysis Material variance - The material variance represents a favourable change in material use. This is all because due to variable nature of material in production process. It could be said that decrease in material use lead to material cost. THIS IS A SAMPLE ASSIGNMENT BUY COMPLETE ASSIGNMENT TO SCORE A+ GRADE CONTACT OUR EXPERTS TOLL-FREE NO: +61 879057034 WHATSAPP NO: +61 424715655 EMAIL: help@assignmentprime.com WEBSITE: https://www.assignmentprime.com TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  9. Labour variance- In respect with the labour variance, an increase of £1000 is seen . nonetheless, £1900 was the found as labour variance as per unit cost was £9 and in actuality, it comes at £10. To overcome the difference of labour cost was compensated against computing cost for actual 18000 units at £10 (Smith and Jacobs, 2011). Fixed overhead- There was no single change in fixed expenses as these expenses are fixed in nature Electricity- The expenses made on electricity are semi variable as these were fixed to a certain level of production. In such expenses, there was no change in fixed proportion but a slight change was seen in variable portion. Maintenance- The maintenance charges are rendered to be stepped cost which increases with a level of production. There were no single changes were found in maintenance cost as production of 100 units was reduced (Zikmund, 2012). P 2.2 Various areas of potential improvements using performance indicators On the basis of various performance indicators, Jeffrey and Son's is able is recommended to make potential improvements:  The financial analysis of company is used as the performance indicator which is used to assess the improvements. A significant decline in sale and profitability is witnessed for company representing hence, it has to take some steps for improving such position (Adler, 2013).  The customers comments over the product and services quality is that way of identifying improvements in such areas. By assessing product quality and defective products allow company to make improvement in manufacturing process. The operations of business are to be monitored for identify improvements. In addition, the feedbacks and complaints of customer’s are to be accessed for making improvements in areas of business (Key Performance Indicators., 2014). P 2.3 Ways to reduce cost and enhancing value and quality In order to enhance the values and quality of product that Jeffrey and Son's can move towards in different areas.  The company can make use of TQM approach which will insures the quality of goods and better use of im- proved and innovative techniques. This is the most effective method of enhancing the quality of products and making improvements in product quality and value (Burns and Scapens, 2000).  Furthermore , the company has to identify the major areas of business in which improvements are to be made and the ways to reduce the cost of production.  Reduction into operational cost is must to improve value of products . TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  10. In addition to that management audit is an another task of monitoring internal operations at the workplace and bringing out changes wherever possible (Zikmund, 2012).  The staff members are to be influenced for carrying out standard performance and accomplishing goals TASK 3 P3.1 P urpose and nature of the budgeting process to the budget holders of Jeffery and Son’s Ltd. `The budgeting process is referred to as a systematic plan of deciding on future incomes and expenses. To a general phenomenon, it is a process of preparing a financial plan that can be used by managers so as to determine the anticipated expenses and incomes (Pandey, 2009.). The major purpose of budgeting is to make estimations for possible incomes and expenses to a company for a specific time span. In respect to given case of Jeffrey & Son’s manufacturing Ltd, budgeting purpose is are used to find out incomes and expenditures for the company for a specific time span. However, the main purposes of budgeting are defined in following points:  The budgeting process purposes at estimating future financial gains and financial losses  To find out the profitability of business for a specific time of span  The major purpose of budgeting is to provide framework to the managers for effective decision making (Fitzpatrick, 2005)  To make comparison between approximated output and actual figures Nature of budgeting process In the above description, budgeting process is explained as a financial plan used for preparing estimations for future incomes and expenses. Further, this is to be ensured that budgeting process is adopted for the purpose of identifying availability of cash within the company (McGowan, 2010). Now a days, budgeting become the most important process which is used for controlling overall business expenses and reducing deficit. The use of effective budgeting plan allows company to overcome negative variance that can harm future financial positions. The nature of budgeting process is that it helps in assessing the financial situation of company for future time period. With the help of budgeting process, the managers can identify the future amount of cash made from the sales activities. Along with this, the cash generated from other activities can also be identified through making use of budgeting process. In addition to that , the necessary future expenditure made on business can be figure out with the help of such process. While preparing the budgets, the organization can easily define surplus through deducting calculated expenses from forecasting revenues. Furthermore, reviewing and revising budget is the next step pf budgeting. At last, the actual outcome are compared with budgeted figures that is called as variance analysis (Holtzman, 2013). TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  11. For given case scenario, it is essential for Jeffrey & Son's through forecasting expected incomes and expenditure for near future. The budgeting process allows managers of manufacturing department to put attention towards sales and preparing policies to enhance the sales. The mentioned company can take major steps towards reduction of costs so as to earn higher profits (Loo, Verstegen and Swagerman, 2011). However, business has to make coordination between different activities of budgeting process. While investigating budget for Jeffrey & Son's , it is noticed that incremental budgeting technique is used to prepare budgets. With the help of above mentioned budgeting process, company anticipates future incomes and expenditures while comparing actual results with budgeted figures while determining variance and taking corrective actions to overcome negative variance. P 3.2 Use of appropriate budgeting technique With an in-depth investigation in to the variance represents that Jeffrey & Son's manufacturing company is recently using incremental budgeting system. However, the major problem associated with such budgeting process is that the company is neglecting volatility of the market. It puts significant affects in budgetary process as well as the figures of budgets. This is the major reason for with company is not accessing favorable variance. Hence, a huge difference is found in budgeted and actual figures. Now for getting better results, it is recommend to use “Zero base budgeting” (Zero-Base Budgeting. 2016). The positive impacts of using Zero base budgeting are as follows :  It will allow company to overcome the limitations of incremental budgeting  The market volatility can be considered at the time of preparing budgets  The business entity can have positive variance between budgeted and actual figures.  It allows actual estimation of operational cost and anticipate revenues P 3.3 Preparation of production and material budgets Production budget October Particulars Sales Less: opening stock Add: Opening stock Units to be produced July August September 110000 16500 15000 108500 105000 11000 13500 107500 90000 13500 15750 92250 105000 15750 16500 105750 Closing Stock: July = 15% * August sales = 15%*90000 = 13500 August = 15% * Sept. sales = 15%*105000 = 15750 September = 15% * Oct. sales = 15%*110000 = 16500 October = 15%*Nov. sales = 15%*100000 = 15000 TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  12. Material purchase budget October 217000 July August 184500 46125 52875 191250 September 211500 52875 54250 212875 Material usage Less: Opening stock Add: Closing stock Purchases 215000 52000 46125 209125 July opening stock = 52000 kg and closing = 25%* 184500 = 46125 Material purchase budget of Jeffrey and Son's smake Particulars Units to be produced Material cost Material to be purchased Add: cost of material in ending inventory Total cost of material needed Less: Cost of material in beginning inventory Cost of material to be purchased July August September 107500 £3.50 92250 £3.50 104250 £3.50 £376,250.00 £80,718.75 £456,968.75 -£166,400.00 £290,568.75 £322,875.00 £91,218.75 £414,093.75 -£80,718.75 £333,375.00 £364,875.00 £91,218.75 £456,093.75 -£166,400.00 £289,693.75 Material usage budget July material usage= 107500 units * 2 kg = 215000 kg August material usage= 92250 units * 2 kg = 184500 kg September material usage= 105570 units * 2 kg= 211,500 kg October material usage= 108500 units * 2 kg = 217,000 kg P 3.4 Preparation of cash Budget Cash budget of Jeffrey and Son's smake Particulars Opening balance of cash Received from debtors Cash sales Total receivable Expenses Payment to creditors Direct wages Variable overhead Fixed overhead Total payable Closing balance of cash July August September £16,000.00 £333,000.00 £567,000.00 £916,000.00 £204,431.25 £335,250.00 £486,000.00 £1,025,681.25 £192,306.25 £330,750.00 £567,000.00 £1,090,056.25 £290,568.75 £300,000.00 £46,000.00 £75,000.00 £711,568.75 £204,431.25 £333,375.00 £300,000.00 £100,000.00 £100,000.00 £833,375.00 £192,306.25 £289,693.75 £300,000.00 £100,000.00 £100,000.00 £789,693.75 £300,362.50 Working notes TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  13. Computation of amount receivable from debtors July 247500 85500 333000 August September Amount received for sales before a month Amount received for sales before two months Sum 236250 99000 335250 236250 94500 330750 Computation of amount of overhead payment Overhead payment Variable overhead Fixed overhead July August September 46000 75000 100000 100000 100000 100000 Computation of production cost July August September Material cost Wages Variable overhead Total variable cost Fixed overhead Units to be produced Total variable cost Total production cost £3.50 £3.00 £1.00 £7.50 £3.50 £3.00 £1.00 £7.50 £3.50 £3.00 £1.00 £7.50 £100,000.00 107500 £806,250.00 £906,250.00 £100,000.00 £100,000.00 104250 £781,875.00 £881,875.00 92250 £691,875.00 £791,875.00 Sales budget July August September Units to be sold Sale price Sales 105000 90000 105000 9 9 9 945000 810000 945000 Cash budget of Jeffrey and Son's Particulars Cash inflow Sales receipts (w.n.1) Cash outflow Purchase Labour (w.n.2) Variable O/H (w.n.3) Fixed O/H July (£) August (£) September (£) 900000 731250 864000 365969 322500 108500 75000 334688 276750 98350 87500 372531 317250 100350 87500 Net cash flow Opening balance Closing balance 28031 16000 44031 -66038 44031 -22007 -13631 22007 -35638 TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  14. THIS IS A SAMPLE ASSIGNMENT BUY COMPLETE ASSIGNMENT TO SCORE A+ GRADE CONTACT OUR EXPERTS TOLL-FREE NO: +61 879057034 WHATSAPP NO: +61 424715655 EMAIL: help@assignmentprime.com WEBSITE: https://www.assignmentprime.com TASK 4 P 4.1 Calculation of variances, identify possible causes and recommend corrective actions Computation of variances of Jeffrey and Son's smake Nature of variance Particulars Budgeted Total Actual Total Variance Per unit Per unit 3.95 per unit 2.4 per kg 7.80 per hour Sales revenue (A) Material Cost (a) 4 per unit 2.4 per kg 14000 3360 13820 3420 -180 60 Adverse Adverse Labor charges (b) Fixed overheads (c) Total Cost (a + b + c) Actual profit (A-Total cost) 8 per hour 2800 4800 10960 3040 2690 4900 11010 2810 -110 100 50 -230 Favorable Adverse Adverse Adverse Sales volume variance (4160- 3040) = (1120) (A) Sales prices variance (14000- 13820) = (180) (A) (Budgeted: 35000*£4- Actual sales) TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  15.  The material prices variances AQ (1425Kg) X AR (£2.40) = £3420 The material prices variances 0(A) AQ (1425Kg) X SR (£2.40) = £3420 The material usage variance 60(A) SQ (3500 Units x 0.4) X SR (£2.40) = £3420  The labor variances AH(345Hrs) X AR (£7.8 ) =£2690 The labor variance rate 70 (F) AH(345Hrs) X SR (£8.0 ) =£2760 the labour efficiency variance SH (3500 Units x0.1)350hrs X SR (£2.40) = £2800  Fixed overhead sending Actual fixed overheard = £4900 The fixed overhead expenditure variances 100(A) Budgeted fixed production overhead = £4800 Budget Original Flexed Actual Output (Production and sales units ) 4000 3500 3500 £ £ £ Sales revenue 16000 14000 13820 Raw materials -(3840) (3360) (1400)Kg (3420) (1425Kg) Labour -3200 (2800)(350Hrs) (2690)(345Hrs) Fixed overheads -4800 -4800 -4900 Operating profit 4160 3040 2810 From the represented calculation, it was accessed that the current sales performance of company is not good as the prices are too low. This can also be said that the organization is making wrong estimation for sales price. The materiel cast was increased and the production manager had not estimated such huge cost. The labour variance was seen somewhat favorable. This is the reason for which profitability of mentioned company came down and to improve the financial position, it is required to reduce consumption of material. TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  16. P 4.2 Operating statements includes both budgeted and actual results Reconciliation operating statement of Jeffrey and Son's Particulars Amount (in £) 3040 -180 -60 110 -100 2810 Budgeted profit Less: Variance of sales Less: Variance of cost Add: Labor Less: Overhead Actual profit The above reconciliation operating statement Jeffrey and Son's representing that that actual profit made by the mentioned entity is less than £230. However, decrease in per unit sales price is seen as the major reason behind this reduction. To some extant material and overhead cost were increased. Operating statement for May £ £ £ Favorable Adverse Sales volume variance 1120 Sales price variance 180 Material price variance 0 Material usage variance 60 Labor rate variance 70 Labor efficiency variance 40 Fixed expenditure variance overhead 100 Total variance 110 F 1460A Total net variance -1350 Budgeted operating profit 4160 Less: Net variance -1350 Actual operating profit 2810 P4.3 Responsibility centers The responsibility centre for production department is that the manager of department has to reduce the excess material consumption in manufacturing process. For this, the respective department has to employ advanced TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  17. tools and tactics. Furthermore, production manager is responsible for reducing wastage for which utilizing of proper resources in the most effective manner (Smith and Jacobs, 2011). The human resources are seen effective in the whole process as labour variance was favourable for attain the profitability the company is recommended for in- dulging into forecasting variance and maintaining favourable labour charges. CONCLUSION In this report, classifications of costs and calculation of the unit costing are shown while using Job Costing method. It was mentioned that financial analysis and customers comments are to be used as the performance indicator which define improvements in business practices. It was found that Jeffrey & Son's manufacturing company was using incremental budgeting but the company is advised to use “Zero base budgeting” for gaining positive outcomes. Some of the cost controlling tactics are to be used by the company to improve existing position. THIS IS A SAMPLE ASSIGNMENT BUY COMPLETE ASSIGNMENT TO SCORE A+ GRADE CONTACT OUR EXPERTS TOLL-FREE NO: +61 879057034 WHATSAPP NO: +61 424715655 EMAIL: help@assignmentprime.com WEBSITE: https://www.assignmentprime.com TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  18. REFERENCES Books and Journals Adler, R., 2013. Management Accounting. Routledge. Backer, S., 2004. Introduction: Marginal Costing as a Management Accounting Tool. Management Accounting Quarterly. 5(2).pp.7 Banks, A., 2008. Budgeting. 3rd ed. McGraw-Hill Australia Burns, J. and Scapens, R.W., 2000. Conceptualizing management accounting change: an institutional framework. Management accounting research, 11(1), pp.3-25. Drury, C., 2008. Management and cost accounting. Routledge. Fitzpatrick, T., 2005. Management and cost accounting .U.S. Patent Application McGowan, A., 2010. Managerial accounting. Issues in Accounting Education, 25(4), pp.792-793. Griffith, A., Stephenson, P. and Watson, P. , 2014. Management systems for construction. Routledge Holtzman, P. M., 2013. Managerial Accounting For Dummies. John Wiley & Sons. Loo, D. I., Verstegen, B. and Swagerman, D., 2011. "Understanding the roles of management accountants". European Business Review. 23(3). pp.287–313. Mistry, V., Sharma, U. and Low, M., 2014. "Management accountants' perception of their role in accounting for sustainable development: An exploratory study". Pacific Accounting Review. 26(1/2). pp.112–133. Pandey, M. I., 2009. Management Accounting, 3E. Vikas Publishing House Pvt Ltd. Smith, D. and Jacobs, K., 2011. “Breaking up the sky”: The characterisation of accounting and accountants in popular music. Accounting, Auditing & Accountability Journal. 24(7) pp.904-931. Zikmund, W., 2012. Business research methods. John Wiley & Sons. Online Method of costing. 2014. [Online]. Available at: <http://www.svtuition.org/2012/09/method-of-costing.html>. [Accessed on 28th January 2016]. Key Performance Indicators., 2014. [Online]. Available at: <http://blog.claytonmckervey.com/blog/2011/01/24/key- performance-indicators/> [Accessed on 28th January 2016]. Zero-Base Budgeting. 2016. [Online]. Available at: <http://www.accountingtools.com/zero-based-budgeting>. [Accessed on 28th January 2016]. TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  19. Appendix Working notes for task 1.3 Lighting & Heating: Machinery X 10/50 x £50,000 — f10,000 Machinery Y 5/50 x £50,000 — £5,000 Assembly 15/50 x £50,000 — f 15,000 Stores 15/50 x £50,000 = £15,000 Maintenance 5/50 x £50,000 = £15,000 Rent Machinery X 10/50 x £100,000 = f20,000 Machinery Y 5/50 x £100,000 = £10,000 Assembly 15/50 x £100,000 = £30,000 Stores 15/50 x £100,000= £30,000 Maintenance 5/50 x £100,000 = £10,000 Insurance & Machinery Machinery X 800/1510 x £15,000 = £7,964 Machinery Y 500/1510 x £15,000 — £4,966 Assembly 100/1510 x :E15,000 — £994 Stores 50/1510 x £15,000= f 497 Maintenance 5/1510 x f15,000= £596 Depreciation of Machinery Machinery X 800/1510 x £150,000 = £79,470 Machinery Y 500/1510 x £150,000 = £49,669 Assembly 100/1510 x £150,000 = £9,934 Stores 50/1510 x £150,000 — £497 Maintenance 60/1510 x £150,000 = £596 Insurance of Buildings Machinery X 15/50 x £25,000 — £5,000 Machinery Y5/50 x £25,000 = £2,500 Assembly 15/50 x £25,000 = f7,500 Stores 15/50 x £25,000 — £7,500 Maintenance 5/50 x £25,000 = £2,500 TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  20. Salaries of works mgmt. Machinery X 3/10 x £80,000 = £24,000 Machinery Y 2/10 x :E80,000 = £16,000 Assembly 3/10 x £80,000 = £24,000 Stores 1/10 x £80,000 — £8,000 Maintenance 1/10 x £80,000 = £8,000 Reappointing workings: based on material issues Machinery X 400/800* £79,964 = £39,982 Machinery Y 300/800 * £79,964 = £29,987 Assembly 100/800 * £79,964 = £9,9995 Based on time spent Machinery x 12/25 * £101,056 = £48,507 Machinery y 8/25 * £101,056 = £32,338 Assembly 5/25 * £101,056 = £20,211 Overhead absorption rate workings Departments = Total / actual machine hours per dept Machinery X = £ 434,906/ 80,000 = £5.44 Machinery Y = £349,960/ 60,000 = £5.83 Assembly = £250,134/ 10,000 = £25.01 Overhead absorption rate Machinery X= 434906/80000=5.44 Machinery Y= 349960/60000= 5.83 Assembly=250134/10000=25.01 Computation of absorption rate £ £ Materials 8 Labour 15 Overheads X (0.8*5.44) 4.34 Y (.6*5.83) 3.5 Assembly (.1*25.01) 2.5 Total cost 33.35 Allocation of cost of support departments on the basis of machine hours Machine shop X Machine shop Y £39,982.00 £45,807.00 £434,906.00 £349,961.00 Assembly Total Store Maintenance Total £29,987.00 £32,338.00 £9,995.00 £20,211.75 £250,133.00 £79,964.00 £101,056.00 TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  21. Allocation of criteria of cost Particulars Indirect wages and supervision Indirect materials Light and heating Rent Insurance and machinery Depreciation of machinery Insurance of building Salaries of works management Description As per the provided amount. As per the provided amount. On the basis of area occupied On the basis of area occupied On the basis of book value of machine On the basis of book value of machine On the basis of area occupied On the basis of number of employees. Units to be produced £400,000.00 8 50000 Material cost per unit material A/B no. of units Overhead absorption rate Machinery X Machinery Y Assembly £300,000.00 £100,000.00 8 8 37500 12500 434906/80000=5.44 349960/60000= 5.83 250134/10000=25.01 Computation of absorption rate Exquisite calculation £ £ Materials 8 Labour 15 Overheads X (0.8*5.44) 4.34 Y (.6*5.83) 3.5 Assembly (.1*25.01) 2.5 Total cost 33.35 Working notes for task 3.1 Working Note-1 Sales (£) 855000 990000 945000 810000 945000 July (£) 85500 247500 567000 August (£) September (£) May June July August September 99000 236250 486000 94500 202500 567000 July: 105000*9 = 945000 August: 90000*9 = 810000 TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  22. September = 105000*9 = 945000 July receipts 10%*855000 May 25%*990000 June 60%*945000 July August receipts 10%*990000 June 25%*945000 July 60%*810000 Aug. September receipts 10%*945000 July 25%*810000 Aug. 60%*945000 Sept. Working Note-2 Labour July August September 1075000*3 = 322500 92250*3 = 276750 105750*3 = 317250 Working Note-3 Variable overhead July (£) 44000 64500 August (£) September (£) June July August September Total 43000 55350 36900 63450 100350 108500 98350 Based on Junes Sales = 40% * 110000 and it should be based on production of June and the difference is in immaterial. 40%*110000 units = 44000*1 = £44000 from June and payable in July 60%*107500 units = 64500*1 = £64500 from July and payable in July 40%*107500 units = 43000*1 = £43000 from June and payable in Aug. 60%*92250 units = 55350*1 = £55350 from June and payable in Aug. 40%*92250 units = 36900*1 = £36900 from July and payable in Sept. 60%*105750 units = 55350*1 = £63450 from June payable in Sept. (d) Budgeted profit and loss account July (£) 945000 47250 897750 August (£) 810000 40500 769500 September (£) 945000 47250 879750 Total (£) 2700000 135000 2565000 Sales Less: bad debts Total MC of 806250 691875 793125 2291250 production Add: opening stock Less: closing stock 82500 123750 TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

  23. Cost of sales Contribution Fixed overheads Profits 2250000 315000 300000 15000 July (£) 376250 322500 107500 806250 August (£) 322875 276750 92250 691875 September (£) 370125 317250 105750 943125 Total (£) 1060500 916500 305500 2582500 Material Direct labour Variable O/H Total MC of production THIS IS A SAMPLE ASSIGNMENT BUY COMPLETE ASSIGNMENT TO SCORE A+ GRADE CONTACT OUR EXPERTS TOLL-FREE NO: +61 879057034 WHATSAPP NO: +61 424715655 EMAIL: help@assignmentprime.com WEBSITE: https://www.assignmentprime.com TOLL-FREE NO: +61 879057034 EMAIL: help@assignmentprime.com WHATSAPP NO: +61 424715655 WEBSITE: https://www.assignmentprime.com ASSIGNMENT HELP & WRITING SERVICE AUSTRALIA

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