Management Accounting in Carina Ltd : Report

Added on - 22 Jul 2020

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MANAGEMENTACCOUNTING
Table of ContentsEXECUTIVE SUMMARY.............................................................................................................1INTRODUCTION...........................................................................................................................1TASK...........................................................................................................................................1Background of Carina Ltd...........................................................................................................1Current scenario..........................................................................................................................21. Calculations:............................................................................................................................2A).Total manufacturing costs as per cost planned production:...................................................2B).Total manufacturing costs per box for each product implementing total of direct materialand labour costs as the allocation base:......................................................................................3C). Total manufacturing as per activity Based costing:..............................................................42 Compare amongst all three methods:.......................................................................................53. Activity based costing.............................................................................................................64. ERP.........................................................................................................................................7CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
EXECUTIVE SUMMARYUnder this report, various tools is used by the firm in order to lower the costs. In presentday period, many-sided quality is business is developing on a regular basis. At the point when anorganization need to extend their business, they need to confront different issue identifying withcosting of their creation, showcasing, finding appropriate wellspring of obligation and so forth.Carina Ltd. is fundamentally a glass maker organization however they are changing theirconcentration as indicated by the request of business condition.Matt Smith, general administrator of Carina Ltd is worried about benefit of individual productofferings. Cited organization has set cost of their products by utilizing benchmarking procedure.Cost of their things are practically equivalent to the comparable existing items. GM imagine thatas opposed to concentrating on generation process, they should focus on unit based costing. Partof data and information relating fabricating process is required in for finding the fundamentalchanges that is expected to done by cited firm keeping in mind the end goal to lowering theirproduction cost.INTRODUCTIONManagement accounting is significant for solving various problems of an organisation.By using various tools of costing, company can reduce wastage of scare resources and enhancetheir sales in long run. Carina limited is a glass manufacturing enterprise, MY group is theirparent company. Carina is operating in various part of this world and they are producing glassornaments, tableware etc. This report will discuss about present method of costing which citedfirm is using in their organisation (DRURY, 2013). Some modern tools of managementaccounting will also become part of this project because they play significant role in reducingoverall production cost.TASKBackground of Carina Ltd.In modern era, complexity is business is growing on continuous basis. When a companywant to expand their business, they have to face various issue relating to costing of theirproduction, marketing, finding proper source of debt etc. Carina Ltd. is basically a glass producercompany but they are changing their focus according to the demand of business environment.Cited enterprise is known for their premium quality and affordable pricing. This is possible1
because of innovative technology and proper use of management accounting tools. Most of theirproducts were used in restaurants, hotels and houses. Because of their sound financial position,they expanded their business across the globe (Fogliatto Da Silveira and Borenstein, 2012). Thisexpansion process stared after the end of second world war.After sometime, management of Carina Ltd. analysed that business of glass tableware isgoing down. This incident forced cited company to explore other options. After conducting someextensive research they figured out they there is a huge scope in the business of glass ornaments.This enterprise had a great image in market and they use innovative technology in theirproduction process. Management decided to use these merits in order to grow earn high amountof revenue and provide stability to the organisation. Cited firm leased a factory in Australia formanufacturing of small, large and speciality glass ornaments.Current scenarioMatt Smith, general manager of Carina Ltd is concerned about profitability of individualproduct lines. Cited company has set price of their commodities by using benchmarkingtechnique. Price of their items are almost equal to the similar existing products. GM think thatinstead of focusing on production process, they should concentrate on unit based costing. Lot ofinformation and data relating manufacturing process is required in for finding the necessarychanges that is needed to done by cited firm in order to cut down their production cost. Accountsdepartment has to play important role in attaining this objective. Carina Ltd. is using volumebased costing for calculating cost of every box. Instead of allocating costs to each productionline, book-keeper of cited enterprise think that they should allot overheads like direct materialand labour to each product. Carina Ltd. is using one process manufacturing of their three types ofornaments. This system create issues relating to ascertaining profitability. Their are variousissues like treatment of depreciation, administration cost etc. which make a huge impact on thecosting method of cited company (James and Savitz, 2011).1. Calculations:A).Total manufacturing costs as per cost planned production:ProductNumber ofOrnamentsOrnament perboxTotal boxesSmall coloured glasses8400001270000Large coloured glasses60000061000002
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