Management Accounting for Cost and Control Question Answer 2022

Running head: MANAGEMENT ACCOUNTING FOR COST AND CONTROL
Management Accounting for Cost and Control
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MANAGEMENT ACCOUNTING FOR COST AND CONTROL
Table of Contents
Question 1: Value Chains...........................................................................................................3
Question 2: Cost of Manufacturing Statement...........................................................................5
1. Cost of goods manufactured statement for 31 July 2019:......................................................5
2. Cost of sales for 31 July 2019:...............................................................................................5
3. Gross profit for 31 July 2019:................................................................................................6
4. Identifying the cost of goods manufactured statement limitations:.......................................6
Question 3: Cost Allocation.......................................................................................................7
1. Providing operating departments information using the direct method:................................7
2. Providing operating departments information using the step-down method:........................7
3. Providing operating departments information departments using the reciprocal method:....8
Question 4:.................................................................................................................................8
1. Allocation rate of overhead:...................................................................................................8
2. Gargantua total overhead allocation:.....................................................................................8
3. Total unit cost:........................................................................................................................9
4. Gargantua job actual overhead:..............................................................................................9
5. Allocation Journal entries:.....................................................................................................9
6. Total profit:............................................................................................................................9
Question 5:.................................................................................................................................9
1. Calculate the cost of goods transferred:.................................................................................9
2. Journal entries for production costs of February:................................................................13

MANAGEMENT ACCOUNTING FOR COST AND CONTROL
3. Differences between weighted average cost method and the FIFO method:.......................14
References:...............................................................................................................................15

MANAGEMENT ACCOUNTING FOR COST AND CONTROL
Question 1: Value Chains
Value chain analysis is considered to be one of the most viable method that can be
used by the companies for analyzing the internal firm activities, which helps in deriving and
recognizing the goal. The evaluation would eventually help in determining the most valuable
activities that can be used by the company to secure the high level of income from their
operations. The benefits of the value chain analysis are mainly depicted as follows.
 The value chain analysis would eventually help in determining the chain of activities that
is mainly conducted by the companies for determining the process that can create value in
the long run.
 The major activities of value chain directly relate to the operations, marketing, outbound
logistics, sales, inbound logistics, and services
 The utilization of the value chain analysis would eventually help in gaining competitive
edge and boost profits in the long run.
 Moreover, the value chain analysis would help in ensuring that value created directly
exceeds costs (Mudambi & Puck, 2016).
 The value chain analysis allows the organization to creating efficiencies by analyzing the
five primary value chain activities, which allows the origination to boost profit levels and
gain competitive edge in the market.
 Therefore, David can use the value chain analysis for adequately improving the level of
value, which is derived by analyzing the least possible total cost.
 The process of the value chain analysis also helps in analyzing the steps that needs to be
taken into consideration, while creating a relevant product.
The above advantages of the value chain analysis directly help in providing the in-
depth analysis of the company’s performance in the long run, which might have direct impact