Managerial Accounting Report - Cost Analysis and Production

This report focuses on managerial accounting principles, specifically examining the impact of automated systems on cost reduction and profitability for ABC Company. The report highlights how implementing automated systems can lead to significant economies of scale, decreasing the average cost per unit and increasing the number of units produced. The analysis covers both fixed and variable costs, demonstrating how automation can streamline production processes and lower operating costs. The report references key managerial accounting texts, including works by Hilton, Platt, Needles, Crosson, and Warren. The conclusion emphasizes the potential for increased profitability through reduced production costs and improved efficiency, ultimately allowing the company to maintain or lower prices while increasing production volume.

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student
Name of the University
Author’s Note

1MANAGERIAL ACCOUNTING
Table of Contents
Part B..........................................................................................................................................2
Requirement b........................................................................................................................2
References..................................................................................................................................3

2MANAGERIAL ACCOUNTING
Part B
Requirement b
It needs to be mentioned that the implementation of automated system in ABC
Company will become able to increase the production of cricket bats for lower costs because
of the fact that significant economies of scale will be possible to that decreases average cost
per unit. It is the main objective of every business organization to increase profitability and
there is not any exception of this for ABC Company (Hilton, Ronald and Platt 2019).
Profitability can be increased through the reduction of costs; and the implementation of the
automated systems will assist the company in decreasing the overall cost of production of the
cricket bats. Automated systems are better as well as more intelligent approach for ABC
Company that will assist the company in cost reduction as well as cost repression. Both the
fixed as well as variable costs of production can be decreased with the help of this automated
system and this will decrease the overall cost of production of the company (Needles,
Belverd and Crosson 2013). This will also make the company able in increasing the services
to the customer while ensuring systematic reduction in the costs of production. As a result of
all these, there will be decrease in the overall operating costs as well as total ownership cost
of the company. These are majorly beneficial for ABC Company since the company will be
able to gain more profit while keeping the cost of the cricket bats same. At the same time,
ABC Company will be able in increasing the number of units produced at the same time
which is significant for increasing the company’s profitability (Warren et al. 2013).

3MANAGERIAL ACCOUNTING
References
Hilton, Ronald W., and David E. Platt. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education, 2013.
Needles, Belverd, and Susan Crosson. Managerial accounting. Cengage Learning, 2013.
Warren, Carl, James M. Reeve, and Jonathan Duchac. Financial & managerial accounting.
Cengage learning, 2013.