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Management Accounting in UKC Furniture

   

Added on  2020-10-22

12 Pages2369 Words68 Views
Management AccountingPART 2
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INTRODUCTIONManagement is one of the valuable aspects for an organisation which is used by thecompany to analyse their financial performance as well as growth opportunities in comingperiod of time. In accordance to deal with all these issues managers are looking to useeffective accounting systems that are help them to summarise and record all their day to dayexpenses or cost those are incurred during the time of production process (Amoako, 2013).Apart from this, uses of costing methods that are help them to evaluate net profit for thecompany. Along with that advantage and disadvantage of using planning tools that can helpin controlling budgets. Comparison with other organisation regarding adoption of accountingsystem that can help them to resolve financial issues are covered under this report.TASK 11.1: Calculation of cost by using various methodsCost is said to be the value which is given for the purpose of getting something inreturn. It is simply that are aspects which is considered while the production of products andservices within an organisation. A business would be raise as capital from different sourcessuch as equity and other crucial sources. The capital is more invested in different projects ofan organisation in accordance with producing sufficient amount of goods. Costing is said tobe systematic procedure of evaluating total cost of UKC furniture in investing over theproduction process with the present cost of capital (Brewer, Sorensen and Stout, 2014). Themanagement of analysis is reliable with the amount to select the accurate option that wouldbe delivering more effective results for the company. Cost is either related directly orindirectly with manufacturing process in more effective manner. There are various types ofcosting that are related with UKC furniture business operations. Some of them are mentionedbelow: Absorption costing: It is said to that cost which is applicable over the period of timein producing product for the company. It includes both variable as well as fixed cost becauseof which they are known as full costing method. It has been seen that they are some manybenefits of using this costing. But at the same point of time, certain limitation of using thiscost is also affecting the net profitability position of the company (Absorption costing, 2018).This seems to be not considered as that much effective for making crucial decision making.
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Marginal costing: It refers as those cost which are applicable additional on theproduction of goods and services within an organisation. It consists of certain variable whileevaluating overall contribution per units during the period of time. Because of which, it issaid to be period costing method. It is more effectively taken into account for making futuredecision as chances of mistakes can be less (JOSHI and et. al., 2011).
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