Management Accounting

Running head: MANAGEMENT ACCOUNTING
Management Accounting
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1MANAGEMENT ACCOUNTING
Table of Contents
Part 1:.........................................................................................................................................2
1: Cost of Work in Process.....................................................................................................2
2: Cost of Finished Goods Inventories:..................................................................................2
Part 2:.........................................................................................................................................3
Introduction:...............................................................................................................................3
Concept of value chain:..............................................................................................................3
Value chain as cost estimation tool:...........................................................................................4
Segments of Value of Chain:.....................................................................................................5
Primary activities:..................................................................................................................5
Support Activities:.................................................................................................................6
Value Chain at BHP:..................................................................................................................7
Conclusion:................................................................................................................................8
References:.................................................................................................................................9

2MANAGEMENT ACCOUNTING
Part 1:
1: Cost of Work in Process
Computation of Work in Process
Particulars
Amount
($)
Amount
($)
Operating Inventory in Process 35000
Raw Materials Used 80000
Direct Labour 160000
Manufacturing Overhead (Notes 1: 40% of Total Manufacturing
Cost) 96000 371000
Less: Ending Inventory 55000
Cost of Work in Process 316000
Notes:
Direct Materials 80000
Direct labour 160000
Total Manufacturing Cost 240000
2: Cost of Finished Goods Inventories:
Computation of Finished Goods Inventory
Particulars Amount ($) Amount ($)
Beginning Finished Goods Inventory 55000
Cost of Goods Manufactured 240000
Less: Cost of Goods Sold 360000
Cost of Finished Goods Inventory 65000

3MANAGEMENT ACCOUNTING
Part 2:
Introduction:
The notion of value chain is entirely based on the process view of the company, the
impression of viewing a manufacturing company as the system that are made up of the
subsystems each with the inputs, transformation procedure and outputs (Kaplan and Atkinson
2015). The activities of value chain are usually conducted to determine the cost and affects
profits. Majority of the organizations that are indulged in the hundreds of activities are
mainly engaged in the process of converting the inputs to outputs.
The corporate value chain, accounting and reporting standards enables the companies
to assess their whole value chain emission effect and recognizes where to place their focus.
The present report would be providing the useful framework of value chain and how the
concept of value chain is utilised to determine costs (Langfield-Smith et al. 2017). The report
would be describing each segments of value chain and would provide explanation regarding
costs in numerous segment of the value chain that are useful for managers. Additionally, BHP
has been selected to explain the main purpose of value chain in the manufacturing companies.
Concept of value chain:
Value chain is defined as the complete range of activities together with the design,
production, distribution and marketing conducted by the business to bring into the existence
the product and service from the concept to the delivery (Chak and Fung 2015). For corporate
firms that manufacture goods, the value chain beings with the use of raw materials to
manufacture their products and comprises of everything that is added prior to selling the
product to customers.