ACC 202 Management Accounting Assignment
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ACC202 management accounting (ACC202)
Added on 2020-05-16
ACC 202 Management Accounting Assignment
ACC202 management accounting (ACC202)
Added on 2020-05-16
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Running head: MANAGEMENT ACCOUNTING (ACC 202)Management Accounting (ACC 202)Name of the Student:Name of the University:Authors Note:
MANAGEMENT ACCOUNTING (ACC 202)1Table of ContentsSituation 1 (Identifying the financial viability of replacing old loader truck with new loadertruck):.........................................................................................................................................2Detecting the financial viability of old and new loader truck with relevant calculationsconducted for Flying Airline Company:....................................................................................2Situation 2 (Calculating financial viability of flight route for Flying Airline Company):.........4A) Detecting non-stop route and one-stop route financial viability by conducting adequatecalculation:.................................................................................................................................4B) Evaluating other factors, which needs to be evaluated before conducting any decision forFlying Airline Company:...........................................................................................................7Situation 3 (Stating viability of the new special tourist charter flight proposal presented toFlying Airline Company):..........................................................................................................8A) Stating the calculations needed by Flying Airline Compony to accept the special touristcharter proposal when adequate spare capacity is present:........................................................8B) Mentioning the viability of the new proposal with adequate calculation when there is nospace available to Flying Airline Company:............................................................................10Reference and Bibliography:....................................................................................................12
MANAGEMENT ACCOUNTING (ACC 202)2Situation 1 (Identifying the financial viability of replacing old loader truck with newloader truck):Detecting the financial viability of old and new loader truck with relevant calculationsconducted for Flying Airline Company:Situation 1 (Not replacing Old loader)ParticularsAmountDepreciation for old loader$ 25,000.00Write off for old loader$ 0.00Proceeds from sale of old loader$ 0.00Depreciation for new loader$ 0.00Operating costs involved for old loader$ 80,000.00Total Operating cost$ 105,000.00The calculation that is conducted in the above table mainly helps in identifying theoverall operating cost incurred by Flying Airline Compony, when old loader truck is used inits operations. The total operating cost mainly amounts to $105,000, which includesdepreciation and operating cost involved for the old loader. This relevant calculation of costincurred from equipment allows the management to take adequate decision for cutting its costand increase their profitability. Cannon (2014) mentioned that with the evaluation of costanalysis management can detect actual cost incurred by its operations, which helps in makingadequate management decision.Situation 1 (Replacing Old loader)ParticularsAmountDepreciation for old loader$ 0.00Write off for old loader$ 25,000.00Proceeds from sale of old loader$ (5,000.00)Depreciation for new loader$ 20,000.00Operating costs involved for old loader$ 50,000.00Total Operating cost$ 90,000.00
MANAGEMENT ACCOUNTING (ACC 202)3The table mainly represent the overall cost if the old loader is replaced with the newloader truck. Relevant reduction in operating cost is detected from operations, which couldeventually help the management of Flying Airline Company to take adequate cost decision.The decline operation cost mainly declined from the value of $105,000 to $90,000, which isrelevantly a profit of $15,000 identified from the implementation of new loader truck. Thecompany with the help of cost analysis can detect financial enhancement, which is attainedfrom the implementation of the new loader. On the other hand, Collier (2015) argued thatviability of cost analysis mainly reduces when adequate research is not conducted by themanagement on cost. The relevant reduction of cost is detected from the sale proceeds of theold loader, which cannot continue in next year. Hence, from second year the overall operationcost will be at the level of $95,000, which is relatively lower from the current expensesincurred by the company. Situation 1 (Differential cost)ParticularsAmountDepreciation for old loader$ 0.00Write off for old loader$ 0.00Proceeds from sale of old loader$ 5,000.00Depreciation for new loader$ (20,000.00)Operating costs involved for old loader$ 30,000.00Total Operating cost$ 15,000.00The differential calculation conducted in the above table mainly helps inunderstanding the overall cost savings, which could be conducted by Flying Airline Companyafter implementing the new loader truck in its operations. The overall differential costanalysis mainly indicates total difference in operating cost by $15,000, which is obtained bythe company if new loader is implemented. The difference in actual operation cost betweenold and new loader can be detected from the above calculation, which amounts to $30,000.Hence, the implementation of new loader truck could eventually allow the company to attain
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