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Activity Based Costing and Production Costs

   

Added on  2020-03-01

15 Pages1629 Words61 Views
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Running head: MANAGEMENT ACCOUNTINGManagement AccountingName of the Student:Name of the University:Author’s Note:
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1MANAGEMENT ACCOUNTINGTable of ContentsAnswer to Question 1:.....................................................................................................................3Answer to Question 2:.....................................................................................................................3Answer to Question 3:.....................................................................................................................4Answer to Question 4:.....................................................................................................................4Answer to Question 5:.....................................................................................................................5Requirement a:.............................................................................................................................5Requirement b:.............................................................................................................................6Answer to Question 6:.....................................................................................................................6Answer to Question 7:.....................................................................................................................7Answer to Question 8:.....................................................................................................................7Requirement a:.............................................................................................................................7Requirement b:.............................................................................................................................8Requirement c:.............................................................................................................................8Answer to Question 9:.....................................................................................................................9Introduction:................................................................................................................................9Advantages of activity based costing:.........................................................................................9Disadvantages of activity based costing:...................................................................................10Conclusion:................................................................................................................................10Answer to Question 10:.................................................................................................................11
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2MANAGEMENT ACCOUNTINGa) Direct Method:.......................................................................................................................11b) Step Method:.........................................................................................................................11c) Reciprocal Services Method:-...............................................................................................11Reference & Bibliography:............................................................................................................14
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3MANAGEMENT ACCOUNTINGAnswer to Question 1:Management accounting is a form of accounting process, which helps the management toanalyze the performance of the operations for business decision-making objectives. For theanalysis, the management accountants require various types of information, which are generallycollected from different forms of financial and non-financial reports. Different reports are usedfor different objectives. The purposes of some mostly used managerial reports are describedbelow: a) Profit & Loss Statement: Profit & loss statement is mainly used for determining the profitearning and return generating capacities of any business firm.b) Accounts Receivable Aging Report: Ageing receivable aging report helps to determine thetotal amount owed from debtors. It is also helpful for ascertaining the credit collection period ofthe firm and identifying the older debts.c) Operating Budget: Operating budget is prepared for estimating various operating expenses, tobe incurred for achieving the revenue target. The firms can raise the necessary fund, required forthe future operation, in advance with the help of this report (DRURY, 2013).Answer to Question 2:Control is one of the main four functions of management accounting. It can be describedas methods of monitoring and evaluating the business operation and taking corrective measuresto revise the actual outcomes to achieve the firm’s objectives.
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