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Cost Management Accounting and Control Solutions Assignment

   

Added on  2019-12-28

11 Pages2596 Words205 Views
MANAGEMENTACCOUNTING FORCOST AND CONTROL
Cost Management Accounting and Control Solutions Assignment_1
Table of ContentsASSIGNMENT 1.............................................................................................................................3QUESTION 1..................................................................................................................................3QUESTION 2..................................................................................................................................3QUESTION 3..................................................................................................................................4QUESTION 4..................................................................................................................................5QUESTION 5..................................................................................................................................6QUESTION 6..................................................................................................................................6QUESTION 7..................................................................................................................................7QUESTION 9..................................................................................................................................8QUESTION 10................................................................................................................................8REFERENCES..............................................................................................................................11
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ASSIGNMENT 1 Costing is an important part at the workplace. It helps in determining the actual price ofthe product as well as the cost which is incur in the product, so better and effective costmanagement different approaches are to be used. In the present report the whole discussion isbased on the major cost elements which are helpful in making the cost of a product. Along withthat all such factors and techniques which are beneficial in making cost effective are also beconsidered. Also the cost which is incurred on the manufacturing plants are taken into points.QUESTION 1ELEMENTS OF COSTMATERIAL- Material cost is the tangible goods used in producing the project. This costcan be direct or indirect. Direct material is quantifiable and can be traced and indirect material isunquantifiable and cannot be traced.For example – A company producing furniture may consider wood as a direct material because itcan be quantified.LABOUR- Wages and salaries paid to the employees involved in manufacturing arecalled as labour the cost can be divided into direct and indirect labour cost (Höglund and et.al.,2016). Labour cost includes wages paid and indirect costs include other wages and incentives butare not traceable.For example-Wages for line managers are considered to be the direct cost.OVERHEAD- Overhead cost is those cost that are related to production but are notclassified as direct or indirect cost. Common overheads includes depreciation on machinery,factory equipment etc.For example- Indirect material and Indirect labourQUESTION 2There are many products at workplace whose recording is must they helps in estimating aproper balance for each and every material in a factory but for averaging technique smallbusiness uses this approach for their business. Basically it can be said that recording cost is forlarge business organisation but average techniques is for the small business.The three best examples of using recording cost techniques are:
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1.Land and building: This method is used just for the purpose of calculating thedepreciation of the assets (Kaplan and Atkinson, 2015). With the help of calculatingproper depreciation on assets it helps in getting the actual value of the fixed assets.2.Plant and machinery: These are used with aim of manufacturing goods and products. So,this is important for a business to maintain proper record of each and every valuables ofthe organisation. The three best examples of average techniques are as follow:1.Grocery store: They maintain their stock just for getting the proper knowledgeable abouttheir products and inventory. This is one of the best way for calculating the actual stockvalue in the store. So, that all things can be stored properly.2.Small business enterprises: The average technique is used by the small business becauseit helps them in manage their stock and also helps in reducing the cost of the production.Because they use their previous year stock for the current year (Lapsley and Rekers,2017).3.Small firms: They manage their accounts and calculate the cost which is incurred on theproduction. QUESTION 3Cost concepts Prime cost: It comprises the direct costs of all the essential elements like direct material,direct labour and direct overheads. Product cost: This comprises payments or expenditures incurred to produce goods orservice i.e. direct material and labour, consumables, factory overheads and so on. Period cost: As name implies, it is closely related to the fixed passage of time like sellingexpense. Conversion cost: It refers to the cost of labour and overheads that are necessary toconvert raw material into finished goods known as conversion cost (Nuhu, Baird and BalaAppuhamilage, 2017). Inventoriable cost: All the expenses which firm incur to get the material into a situationof ready for sale are called inventoriable costs. It consists of material, labour and both the fixed& variable overheads.
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