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Costs and Revenues Assignment - Marks and Spencer

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Added on  2020-10-22

Costs and Revenues Assignment - Marks and Spencer

   Added on 2020-10-22

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Costs and Revenues
Costs and Revenues Assignment - Marks and Spencer_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 The purpose of internal reporting and provision of precise information..............................11.2 Relationship between a number of costing systems within Marks and Spencer...................11.3 Identification of Cost, responsibility, profit, and investment centres...................................11.4 Cost classifications and their uses.........................................................................................21.5 The differences between absorption and marginal costing...................................................2TASK 2............................................................................................................................................32.1 Presenting cost sheet.............................................................................................................32.2 Analysing cost information...................................................................................................32.3 Various stages of inventory...................................................................................................42.4 Valuation of inventory using various methods....................................................................42.5 Behaviours of costs...............................................................................................................62.6 Cost information and the costing systems............................................................................6TASK 3............................................................................................................................................83.1 Allocation and apportionment of overhead cost .................................................................83.2 Calculating overhead absorption rates for ABC Ltd:............................................................93.3 Calculation of over and under absorption of labour and wages..........................................103.4 Methods of allocation, appropriation and absorption.........................................................113.5 Solving overhead data queries............................................................................................11TASK 4..........................................................................................................................................124.1 Comparison of budgeted and actual cost .........................................................................124.2 Analysis of variance...........................................................................................................124.3 Information of significant variance.....................................................................................124.4 Preparation of management report......................................................................................12TASK 5 .........................................................................................................................................145.1 Estimates of future incomes and cost for decision making.................................................145.2 Effect of change in activity level on unit cost.....................................................................145.3 Calculation of Effect of change in activity level on unit cost.............................................15
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5.4 Identification of factors affecting short and long term decision making............................15REFERENCES..............................................................................................................................16
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TASK 11.1 The purpose of internal reporting and provision of precise informationInternal reporting is essential for Marks and Spencer in order to compile its financial andoperational information. The reporting is done on a regular basis by the organisation. It tends toincrease the organisation's performance and functioning. The reporting revolves around composing both of financial and operational informationand later the composed information is used by the organisations stakeholders to make therequired evaluations. It uses information such as failure rates, turnover of the employees,expense trends and sales data (Kunter, 2012). The evaluations made by the organisationsstakeholders is then used to improve the performance of Marks and Spencer. Along with it, The provision of accurate information is important because accurate orprecise information will make it possible for one to gain the required knowledge properly. If theinformation is not accurate it can cause problems for one which can become hard to solve later. 1.2 Relationship between a number of costing systems within Marks and SpencerCosting systems are important for Marks and Spencer in order to make the estimation ofthe cost of products, profitability analysis, inventory valuation, cost control etc. Historicalcosting in which the costs are established after they have been incurred later used in analysingabsorption costing to understand the fixed manufacturing overheads. Their relation allows Marksand Spencer in allocation of its products and services and is later used in Stock value(Khodabakhshi and Aryavash, 2014). The method of Direct costing in which the products of Marks and Spencer are chargedwith cost types that vary from the volume. This type of costing is uses marginal costing methodwhere fixed and variable are classified differently. This relation between these costing systemallows Marks and Spencer to gather the optimum data to keep the production and sales smooth.1.3 Identification of Cost, responsibility, profit, and investment centresBelow identified are the type of cost, responsibility, profit and investment centres: Cost centres: A place where costs are segregated and traced are known as cost centres.Marks and Spencer cost centres could either be a team, division, department, project, machineetc. Responsibility centre: A responsibility centre is an organisational subunit in Marks andSpencer (Ovchinnikov, 2011). Marks and Spencer is having a number of smalls groups or1
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