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(solved) Assignment : Management Accounting

   

Added on  2020-09-17

6 Pages1330 Words31 Views
MANAGEMENT ACCOUNTING

TABLE OF CONTENTSINTRODUTION .............................................................................................................................3(i) Discuss various management accounting costs. ...................................................................3(ii) Relevance of various cost in decision making process of organization. ..............................4CONCLUSION ..............................................................................................................................5REFERENCES ...............................................................................................................................6

INTRODUTION Management accounting is the process of preparing management reports and accountsthat are useful in gaining accurate financial and statistical information that are used by themanagers to implement business decisions on daily basis. This report is based upon various typesof management accounting costs and relevance of various costs in implementing organizationaldecisions. (i) Various management accounting costs Cost accounting is the process of accounting that is used to evaluate the costs that areassociated with the products, production and projects of the organization in order to amount thecorrect information on financial reports. It also helps in conducting decision making process byproviding relevant and reliable information regarding the financial status of company. Themeasures of cost accounting is sub divided into direct, indirect, variable, fixed and operatingcost. Various management accounting costs: Direct cost: This is related to production of goods and services. A direct cost is the expenses ofthe company that are made in material, labor and all the distribution cost that are related to thedistribution cost that are linked with the production of the products. Identifying direct cost iseasy as it is linked with the products and projects. Example: If a worker is spending nine hoursfor building a bicycle for a manufacturing company, then in such case, the direct cost that islinked with the bicycle is wages that are paid to the workers and parts that are used to build thebicycle (Banker, 2014). Indirect cost: These costs are not directly associated with the objects such as functions orproducts etc., indirect cost is whether linked with the variable cost or fixed cost. Variable that areincluded with indirect cost are security and personnel costs. These costs are not directly linkedwith the production. These are the expenses which are not directly linked with producing goodsand services. Variable cost: It is the cost that keeps on changing as per the requirements of the productiondepartment. This cost depends upon the type of the product that company is going to produce fortheir customers. If the volume of production increases than variable cost enhances automaticallyand vice versa.

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