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Task 14 Task 14 - Cost classification and analysis of cost report of September month10

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Added on  2020-01-21

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Management Accounting TABLE OF CONTENTS2 Index of Tables 3 Introduction 4 Task 14 1.1 Description of cost classification 4 Units 1.2 Computation of job cost by considering method of job costing 5 1.3 Computation of exquisite cost by using absorption method of labour | |Analysis of cost data of exquisite 9 Task 210 2.1 Preparation and analysis of cost report of September month10 2.2 Use of performance indicators in order to identify potential areas of improvement 11 2.3 Recommendations for cost reduction and enhancement is quality and value 12 Task 313 3.1 Nature and

Task 14 Task 14 - Cost classification and analysis of cost report of September month10

   Added on 2020-01-21

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Task 14 Task 14 - Cost classification and analysis of cost report of September month10_1
TABLE OF CONTENTSTable of Contents.................................................................................................................................2Index of Tables.....................................................................................................................................3Introduction..........................................................................................................................................4Task 1...................................................................................................................................................41.1 Description of cost classification...........................................................................................41.2 Computation of job cost by considering method of job costing............................................51.3 Computation of exquisite cost by using absorption costing technique..................................61.4 Analysis of cost data of exquisite..........................................................................................9Task 2.................................................................................................................................................102.1 Preparation and analysis of cost report of September month..............................................102.2 Use of performance indicators in order to identify potential areas of improvement...........112.3 Recommendations for cost reduction and enhancement is quality and value.....................12Task 3.................................................................................................................................................133.1 Nature and purpose of budgetary procedure........................................................................133.2 Selection of suitable method for the preparation of budgetary statements..........................133.3 Purchase and production budget..........................................................................................133.4 Cash budget..........................................................................................................................14Task 4.................................................................................................................................................174.1 Variance analysis.................................................................................................................174.2 Operational reconciliation statement...................................................................................184.3 Report of variance analysis..................................................................................................19CONCLUSION..................................................................................................................................19REFERENCES...................................................................................................................................202
Task 14 Task 14 - Cost classification and analysis of cost report of September month10_2
INDEX OF TABLESTable 1: Statement showing total and unit cost of Job 444.............................................................4Table 2: Allocation Criteria of cost ...............................................................................................5Table 3: Allocation of cost of support departments on the basis of machine hours........................7Table 4: Statement showing computation of exquisite....................................................................7Table 5: Statement showing computation of exquisite....................................................................8Table 6: Cost report of September...................................................................................................9Table 7: Production budget (in units)...........................................................................................12Table 8: Material purchase budget in amount................................................................................12Table 9: Cash budget.....................................................................................................................123
Task 14 Task 14 - Cost classification and analysis of cost report of September month10_3
INTRODUCTIONManagement accounting is a procedure used for the analysis and interpretation ofinformation collected through cost and financial accounting. Objective of this subject is to assistmanagerial person in making viable decisions in order to attain aims and objectives of businessin an effective manner (Dekker, 2015). Present project report is focused on evaluation of variouscost concepts by considering information of Jeffrey & Son’s Ltd. In this report, theoreticaldescription and practical application will be provided regarding cost computation, budget andvariance analysis. TASK 11.1 Description of cost classificationCost is an amount paid or payable by business in order to obtain product or service.Classification of cost can be done of the basis of following factors:BasisDescriptionExampleElementThis classification is based on costobjective. On this basis, cost is classifiedinto direct and indirect cost. Direct costis incurred for the production activitieswhich are necessary for business(Fullerton, Kennedy and Widener,2014). Further, indirect is incurred toattain economic benefit in order toenhance efficiency and profitability ofbusiness. Example of direct cost is purchase of rawmaterial and indirect cost is amountincurred on selling and distributionexpenses.NatureBy considering nature of expenses, costis classified into material, labour andoverhead. Material cost includes amount incurredon variables required for production suchas raw material (Suomala, Lyly-Yrjänäinen and Lukka, 2014). Labourcost includes wages and overheadconsists of other related expenses. 4
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