Cost and Management Accounting

The assignment content discusses the concept of cost and management accounting, highlighting the importance of conventional costing approaches in construction projects like the Great Pyramid of Giza. It also touches upon modern cost management techniques, including processed accounting, project management plans, and variance analysis. Additionally, it explores the significance of budgeting in organizations, including its preparation, regulation, and allocation of resources.

RUNNING HEAD: COST AND MANAGEMENT ACCOUNTING
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Contents
QUESTION 1...........................................................................................................................................2
A........................................................................................................................................................2
B........................................................................................................................................................3
QUESTION 2...........................................................................................................................................4
QUESTION 3...........................................................................................................................................5
(a)......................................................................................................................................................5
(b)......................................................................................................................................................6
QUESTION 4...........................................................................................................................................8
A........................................................................................................................................................8
B......................................................................................................................................................11
QUESTION 5.........................................................................................................................................12
A......................................................................................................................................................12
B......................................................................................................................................................14
References...........................................................................................................................................16

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QUESTION 1
A
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B
The Great Pyramid of Giza is the oldest pyramids in Egypt. It is one of the seven
wonders of the world. This structure is considered to be the largest and tallest in the Earth.
Apart from the beauty and magnificence, the actually wonder is the construction of the
structure. For pyramid construction, conventional costing approach had been applied which
includes many stages such as execution of proper plan, proper documentation, execution,
progressions, designing and closures (Lavia López & Hiebl, 2014). There is a huge difference
between costing approach applied in construction of great pyramid and the modern
management techniques (Lanen, 2016). Earlier many deficiencies found in the construction
and thus the modern cost management accounting have been integrated which has advanced
stages of techniques. According to the modern approach, processed accounting would be
categorized as best technique for the construction of the great wonder (Stretton, 2014). In the
modern technique, proper project management plan has been executed which contains all the
systematic data for the project execution. Further includes the flexibility for any future
changes in the project plan. Moreover, project concerns, project budgets, monitoring and
regulating the project progressions etc. have been incorporated and most importantly all the
costs incurred for the construction is properly bifurcated and allocated to the correct
department (Otley & Emmanuel, 2013).
QUESTION 2
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QUESTION 3
(a)
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(b)
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QUESTION 4
A
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B
Variance Analysis is very important technique used in the businesses which measures
the performance by way of variances between budgeted costs and the actual costs. The
variance analysis might lead to bridge the gap between the business aims, approaches or
purposes. Further analysis of variance actually identifies the deviations among the
estimations and the actual occurrence of any resource and also regulated the differences.
Variations in any accounting budget can also be identified using the variance of analysis.

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It also applied in financial and operational data that identifies the reason of the
variance. Variance analysis also hold significance in human resource division in the
organisation. The action of the man power in the organisation will affects the financial results
and with the help of variance analysis tool it builds the relationship between different
divisions of the organizations. Variance analysis tool also helps the organisation to spot
movements, prospects, threats and issues to short or long-term achievement.
QUESTION 5
A
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B
Budget means an estimation of a resources, incomes or costs for a definite period of
time for measuring future aims, strategies and performance. Budget preparation is very
important for any entity and it should be completely allied with the government rules and
strategies. In every budget, expenses or revenues must be regulated and also specific
allocation of resources must also be merged in the budget. The politicians used the budgets
for improving the nation’s wealth and economy.

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The above comic strip depicts that one person reading the budget announcements in
the newspaper and other one listen to him. Further this picture explains that the accountant of
the company is misunderstood the budget and considered as monthly instead of yearly and
which might mean that the budget is not in the interest of the organisation and that can might
raise a political issue.

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References
Lanen, W. (2016). Fundamentals of cost accounting. McGraw-Hill Higher Education.
Lavia López, O., & Hiebl, M. R. (2014). Management accounting in small and medium-sized
enterprises: current knowledge and avenues for further research. Journal of
Management Accounting Research, 27(1), 81-119.
Otley, D., & Emmanuel, K. M. C. (2013). Readings in accounting for management control.
Springer.
Stretton, A. (2014). Some differences between project management and accounting
perspectives on project cost control.