Assignment on Cost and Revenue
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Added on 2020-10-22
Assignment on Cost and Revenue
Added on 2020-10-22
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Cost and Revenue
Table of ContentsINTRODUCTION......................................................................................................................4TASK 1 .....................................................................................................................................41.1 Purpose of internal reporting in the organisation.............................................................41.2 Relationship between costing system in the organisation................................................41.3 Identify the responsibility centres, cost centres, profit centres and investment centreswithin an organisation ..........................................................................................................41.4 Explain the characteristics of different types of cost classifications and their use incosting....................................................................................................................................51.5 Explain the differences between marginal and absorption costing..................................5TASK 2......................................................................................................................................62.1 Record cost information for material, labour and expenses in accordance with the.......6organisation’s costing procedures..........................................................................................62.2 Analyse cost information for material, labour and expenses in accordance with the......6organisation’s costing procedures..........................................................................................62.3 Define the various stages of inventory.............................................................................62.4 Value inventory using these methods:..............................................................................62.5 Describe the behaviour of these costs:.............................................................................72.6 Record cost information using these costing systems......................................................8TASK 3......................................................................................................................................83.1Attribute overhead costs to production and service cost centres in accordance withagreed bases of allocation and apportionment.......................................................................83.2 Calculate overhead absorption rates ................................................................................83.3 Make adjustments for under or over recovered overhead costs in accordance withestablished procedures..........................................................................................................103.4 Review methods of allocation, apportionment and absorption at regular intervals,......10implementing agreed changes to methods............................................................................103.5 Communicate with relevant staff to resolve any queries in overhead cost data ..........11
TASK 4....................................................................................................................................124.1 Compare budget costs with actual costs, noting any variances......................................124.2 Analyse variances for management reports....................................................................124.3 Provide information for budget holders for the significant variances ...........................124.4Prepare management reports...........................................................................................12Start with the end in mind....................................................................................................13TASK 5...................................................................................................................................135.1 Present estimates of future income and cost for decision making:................................135.2Explain the effect of changing activity levels on unit costs............................................135.3 Calculate the effect of changing activity levels on unit costs. ......................................135.4 Identify factors affecting short-term and long term decision making............................14CONCLUSION........................................................................................................................14REFERENCES.........................................................................................................................15
INTRODUCTIONCost and revenue are the concepts of accounts and for an organisation it is importantto evaluate its value of products. Income can be generated when company earns profits frombusiness. In this report various topics are discussed which are as follows: nature and role ofcosting system and its relations, purpose of internal reporting, various stages of inventory andits methods. Apart from this different types of costs are describes such as job, batch, unit andservice.TASK 1 1.1 Purpose of internal reporting in the organisationInternal reporting provides the information regarding financial system, sales andpurchase data, employee turnover of company. Through it an organisation can analyse itsperformance of its employees and different departments (Internal reporting .2018). Socorporation can know evaluate the strength and weakness of its business and according to thisit can take necessary steps while can help in future. It helps the management to takeimportant decisions so that they can make effective action plan. Financial performance can beanalysed by this system so that company can know improvement is needed or not.1.2 Relationship between costing system in the organisationThere are various costing system which help the company to analyse the worth oftheir products. Marginal costing consider only variable expenses and fixed expenditure doesnot include in it so organisation cannot know the overall value of the goods. Absorptioncosting is tool which is used to absorb the variable and fixed cost. Relationship in these bothmethods are that they can ascertain the value of changeable overhead in the productionprocess. Organisation can use these on the basis of its requirements.1.3 Identify the responsibility centres, cost centres, profit centres and investment centreswithin an organisation Responsibility centre is concern with the organisation for which a manger hasresponsibility and authority. Detailed corporation chart is a logical source for considering thiscentres. Different departments of the company are included in it. In cost centre management of department only accountable to control the cost in the company and it does not directlyrelated to the profits.
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