Types of costing and decision making

HI5017
Managerial Accounting

Contents
PART-A......................................................................................................................................................3
Case study...............................................................................................................................................3
1. Types of costing and examples for at least three costing of business...................................................3
2. Identify the information relevant to the decision and information which are irrelevant to make
decision to buy appliance........................................................................................................................4
3. Cost to be incurred by Couple for the laundry and computation..........................................................4
1. Purchase of the Appliance (alternative 1)........................................................................................4
2. Self-Delivery service laundry (Given alternative-2)........................................................................6
3. Delivery laundry service (alternative 3)..........................................................................................6
4. Frank decision to hire additional employees? Computation.................................................................7
5. Option to take rental place or existing home place? Number of children to be served and additional
employees to be hired?............................................................................................................................8

Existing current location..........................................................................................................................8
Option B: Move to a larger facility........................................................................................................10
Part B: Journal Article Critique.................................................................................................................12
1. Given parts of the management accounting system in two companies and its relevance.......................12
2. Innovation process in firm described in article accompanied with the innovation that needs to be
organized to transmit new information and how MAS contributes to innovation process.....................14
3. 4 specific outcomes and lesson learned for the journal articles (Two outcomes)...............................15
References.................................................................................................................................................17

PART-A
Case study
1. Types of costing and examples for at least three costing of business
In organization, there are several cost incurred to operate the business effectively. However,
below are the following type of costing given as below (Biondi, Gulluscio, Rossi, A., and
D'Alessio, 2017).
Fixed cost: - This is related to the annual licensing fees charged on the business. It is fixed and
does not change with the changes in the production unit. The annual cost is $ 225 for the given
year.
Incremental fixed cost- This is the cost which is kept fixed but changes with the changes in time
and does not vary with the changes in the time. The incremental cost is related to $ 120 which
was incurred for the washer.
Variable cost: - This cost incurred on the production unit and vary accordingly. However, this
cost changes with the changes in the production unit. This could related to the changes in the rate
of the mileage which will be changed with the changes in the total derived unit in process
(Biondi, Gulluscio, Rossi, A., and D'Alessio, 2017).
2. Identify the information relevant to the decision and information which are irrelevant to make
decision to buy appliance
It is analyzed that there are following cost information which are used to assess the decision
making related to buying the appliance. However, cost related to investment, return on capital
employed and other factors are considered for the same.
 Initial capital investment to buy new appliance
 Cost related to the installation of the appliance
 Other operating cost