Costs and Revenues Assignment - J.P. Morgon

Added on - Dec 2020

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COSTS AND REVENUES
Table of ContentsINTRODUCTION...........................................................................................................................11........................................................................................................................................................11.1 Purpose of internal reporting and providing accurate information to management..............11.2 Relationship between various costing system.......................................................................11.3 Identifying responsibility centre, cost centre, profit centre and investment centre withinthe organisation...........................................................................................................................21.4 Characteristics of various types of cost classification and their use in costing.....................21.5 Difference between marginal and absorption costing...........................................................32........................................................................................................................................................42.1 Recording Cost information of the organisation...................................................................42.2 Analysing cost information of the organisation....................................................................52.3 Define the various stages of inventory..................................................................................62.4 Value inventory using various method.................................................................................62.5 Behaviour of these costs........................................................................................................82.6 Recording cost information using these costing system.......................................................93........................................................................................................................................................93.1 Overhead costs to production and services cost centres.......................................................93.2 Calculation of overhead absorption rate...............................................................................93.3 Adjustment for under and over recovered overhead costs..................................................103.4 Methods of allocation, apportionment and absorption........................................................103.5 Communicate with relevant staff to resolve queries related to overhead cost data............114......................................................................................................................................................114.1 Compare budget cost with actual coast..............................................................................114.2 Analyse variances for report...............................................................................................124.3 information for budget holder of significance variance.....................................................124.4 Management report.............................................................................................................125......................................................................................................................................................135.1 An estimation of future income and costs for decision making process.............................135.2 Effect of changing activities levels on unit cost.................................................................14
5.3 Effect of changing activity levels on unit cost....................................................................145.4 factor affecting short term and long term decision making...............................................14CONCLUSION..............................................................................................................................15REFERENCES.............................................................................................................................16
INTRODUCTIONCost and revenue are the major part of any organisation where cost refer to actual amounton which the good is sale by the organisation and revenue refer to the actual income that has inthe business activity and unit. Purpose of this study is based on J.P. Morgon which is one of theleading organisation in UK and it is aim to understand the nature of costs and revenues. Thestudy will record and analyse cost information as well as it will utilise the information collectfrom costing system.11.1 Purpose of internal reporting and providing accurate information to managementInternal reporting include the compilation of operational and financial information, that isdistributed to individuals within an organisation to improve their performance ((ArzbächerHoltgrewe and Kerst, 2017)). The purpose of internal reporting of financial and operationalinformation is:Internal reporting give the holistic view of enterprise performance and on which post thepotential new employees are needed that help management to hire accordingly andmanage the employees.The purpose of internal reporting is to manage data that can be financial or operationalthat help management to utilise the financial resources effectively as well as non-financial resources that improve the work performance of the organisation.1.2 Relationship between various costing systemJ.P. Morgon Co. design costing system to monitor the cost and the system control andreport to management about costs, profitability and revenues. There are various costing system:Marginal costing-The marginal costing implies the additional cost that involved inproducing an extra unit of output. Marginal cost = Direct labour+ Direct material+Variableoverhead+ Direct expenses.Standard Costing-Standard costing is a costing method that implemented by J.P.Morgon Co. to compare standard revenues and standard costs with actual result, this systeminclude cost layering system such as; FIFO and LIFO method.Absorption costing-This costing method absorb all the manufacturing cost includingfixed and variable cost.1
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