Components of Management Accounting System
Added on 2021-02-19
15 Pages3902 Words96 Views
|
|
|
MANAGERIALACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................4PART A...........................................................................................................................................41. Different types of cost included in the case study...................................................................42. Relevant & Irrelevant Information for making decision related to purchase of appliances...53. Cost of laundering the clothes and calculation of cost for each laundering option.................64. Decision related to hire a new employee.................................................................................75. Evaluation of two alternatives rental & home.........................................................................8PART B..........................................................................................................................................101. Explaining the components of management accounting system with relevance in decisionsmaking........................................................................................................................................102. Defining contribution of management accounting to innovation process.............................113. Outcomes from research findings..........................................................................................11CONCLUSION..............................................................................................................................12.......................................................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONManagerial accounting is concerned with the process of preparing internal managerialreports and statements which assist the management of the company in their decision making. Italso supports in formulation of strategies and plans, performance management and expertise infinancial reporting and control related to the business resources. Management of a business firmcan prepare future financial plan for their business and can make various plans so that cost ofproduction can be monitored and controlled. The present report is based on two cases related to the management technique to beadopted in the business for successful accomplishment of business goals along with highprofitability. The report will discuss about laundry solution to be undertaken by Franks in firstcase and in other it will define about new theory of innovation which will benefit Canon, Inc.and Apple Computer, Inc.PART A1. Different types of cost included in the case studyCost is an essential element without which a business organization is unable to operate itsbusiness. Further, a company set its profit margin by determining price of products with the helpof cost. Internal managers of business firms makes decisions related to managing cost ofproducts and eliminate unnecessary cost incurred during production process. A child care business is named as Nanna's House inaugurated by Douglas & PamelaFrank in their home town and for operation functions of business they have to pay different typesof cost, which are discussed below-Fixed CostExpenses made by any firm or business that does not fluctuate with the change inproduction or sales level. It is a type of cost which compulsorily paid by company either it isoffering a service or producing any product at a particular period. Thus, operations of a companydoes not have any impact on amount of fixed cost. This cost is a type of indirect cost.Insurance, Depreciation, Rent, Salary, Utilities, Interest & Taxes all are example of FixedCost. For Example- Nanna's House also making payment of different types of Fixed Cost such asInsurance cost of $3,840 annually and License Fees of $225 charged by state. Further(Bento,Mertins and White, 2018). Variable Cost
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents