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Cost Allocation and Matrix Algebra

   

Added on  2020-02-24

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Running head: MANAGEMENT ACCOUNTING FOR COST AND CONTROLManagement Accounting for Cost and ControlName of the Student:Name of the University:Author’s Note:Course ID:
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1MANAGEMENT ACCOUNTING FOR COST AND CONTROLTable of ContentsAnswer to Question 1:.....................................................................................................................2Answer to Question 2:.....................................................................................................................3Answer to Question 3:.....................................................................................................................3Answer to Question 4:.....................................................................................................................4Answer to Question 5:.....................................................................................................................6Answer to Part A:........................................................................................................................6Answer to Part B:.........................................................................................................................7Answer to Question 6:.....................................................................................................................7Answer to Question 7:.....................................................................................................................8Answer to Question 8:...................................................................................................................10Answer to Question 9:...................................................................................................................12Answer to Question 10:.................................................................................................................14Answer to Part A:......................................................................................................................14Answer to Part B:.......................................................................................................................15Answer to Part C:.......................................................................................................................15References:....................................................................................................................................19
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2MANAGEMENT ACCOUNTING FOR COST AND CONTROLAnswer to Question 1:The purposes of management accounting reports are several, some of the main purposesare evaluated as follows:Budget report:The budget reports enable the business owners in evaluating the overall financial positionof their organisations and for large-scale organisations, the managers assess the performance ofeach department along with costs of control. For example, the business owners and managers ofthe organisations could use the budget reports in order to give staff incentives (Black, 2017).Accounts receivable aging report:The accounts receivable aging report is a vital tool in order to handle cash flow for thefirms that allow the credit terms of their customers or clients. The managers of the organisationscould segregate the balances of the customers based on their owed timeframe. For example, in asituation where a huge number of customers could not settle their balances, the organisation isrequired to tighten its policies of credit. Moreover, this report is of immense importance for thecollection department, as they could have an overview of the previous debts (Christ & Burritt,2013).Operational budget report:This budget report is developed in order to estimate different expenditures that theorganisation needs to incur in order to accomplish the overall revenue target. The organisation
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3MANAGEMENT ACCOUNTING FOR COST AND CONTROLcould accumulate the needed funds for conducting its future operations in advance with the helpof this report (Drury, 2013).Answer to Question 2:As laid out by Fayard et al., (2014), control is the procedure of analysing, measuring,correcting and monitoring the actual outcomes to ensure that the business organisations achievetheir overall plans and goals. Feedback is the option available for the organisations in order toachieve these plans and goals. Feedback could be taken into account as the information inassessing or correcting the steps undertaken at the time of time implementation. Managementaccounting provides immense value to the control function through the production of controlreports and performance reports, which signify variances between the expected and actualperformances. The above-stated reports abide by the “principle of management by exception”. This isbecause they serve as the platform for ensuring necessary corrective measures in order to controloperations. If there are significant differences between budgeted and actual results, a managerneeds to examine for determining the things in line and likely that the departments orsubordinates might need support (Gopalakrishnan et al., 2015).Answer to Question 3:As pointed out by Horovitz & Webb (2015), product costing is the procedure to detectand understanding the various accrued expenses in the sale and manufacture of a specificproduct. This begins with the purchase of raw materials to expenditures associated with thetransportation of the final goods to the retail stores. This is widely taken into account as greatly
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4MANAGEMENT ACCOUNTING FOR COST AND CONTROLsignificant element on planning and analysing the overall business strategies. Hence, productcosting system accumulates the cost spent in the production process and allocates the costs to thefinal output of the organisation. The four primary purposes of the product costing system aredepicted as follows:To gather the relative cost of production To apportion the cost of production to the product unitsTo ascertain greater cost of production with higher accuracy for varied number of nearlyequivalent itemsGreater control over the cost of production Answer to Question 4:Manufacturing statement (Normal view):
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5MANAGEMENT ACCOUNTING FOR COST AND CONTROLManufacturing statement (Formula view):
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