Management Accounting for Cost Control

This assignment delves into the concepts of management accounting, particularly focusing on cost and control. It covers topics like process costing, calculation of equivalent units, cost per equivalent unit, and variances in material pricing and usage. The assignment also explores the impact of selling a product at split-off versus continuing production, and the importance of variance analysis in decision-making. It includes practical examples and calculations to illustrate these concepts.

Running head: MANAGEMENT ACCOUNTING FOR COST AND CONTROL
Management accounting for cost and control
Name of the student
Name of the university
Author note

1MANAGEMENT ACCOUNTING FOR COST AND CONTROL
Table of Contents
Question 1..................................................................................................................................2
Requirement a........................................................................................................................2
Requirement b........................................................................................................................3
Question 2..................................................................................................................................4
Calculation of equivalent units...............................................................................................4
Cost per equivalent unit.........................................................................................................5
Cost of closing stock and finished goods...............................................................................5
Question 3..................................................................................................................................6
Requirement a........................................................................................................................6
Requirement b........................................................................................................................6
Question 4..................................................................................................................................7
Requirement a........................................................................................................................7
Requirement b........................................................................................................................9
Question 5..................................................................................................................................9
Requirement a........................................................................................................................9
Requirement b......................................................................................................................11
Reference..................................................................................................................................12

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Question 1
Requirement a

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Requirement b
4500 years back the Giza Pyramid was constructed using the conventional approach.
Owing to some issues it is required to use the modern approach of cost management
accounting for construction. If the modern concept is to be considered, process costing will
be appropriate for the Giza Pyramid construction (Fullerton, Kennedy & Widener, 2013).

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Question 2
Calculation of equivalent units

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Cost per equivalent unit
Cost of closing stock and finished goods

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Question 3
Requirement a
Requirement b
Net profit generated under the normal circumstances will be calculated as follows –
As the company sells product A as $ 2 per kg at the point of split-off, the business
operational results will be as shown below –

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It is identified from above calculation that the company will suffer significant loss
under the new circumstance. Therefore, it shall continue producing the product A rather than
selling the product outside.
Question 4
Requirement a
Material price variance
Material usage variance

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Actual direct rate of labour per hour

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Requirement b
Most important tools for the management of business is variance analysis. It assists
analysis of reason behind the reason of difference among the budgeted amount and actual
amount. Various segments where variance analysis is used are human resource sector and
organizational behaviour (Stretton, 2014).
Question 5
Requirement a
Budgeted statement of income

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Budgeted retained earnings statement
Workings –
Schedule for cost of goods sold

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Requirement b
While preparing the budget, the government priorities and policies shall be taken into
consideration. There shall be correlation between budgeted expenses and policies to enhance
the forecasting of revenue (Otley & Emmanuel, 2013).
The above image stating that the ordinary people are also concerned about the budget.

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Reference
Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2013). Management accounting and
control practices in a lean manufacturing environment. Accounting, Organizations
and Society, 38(1), 50-71.
Otley, D., & Emmanuel, K. M. C. (2013). Readings in accounting for management control.
Springer.
Stretton, A. (2014). Some differences between project management and accounting
perspectives on project cost control.