Management Accounting for Costs & Control

Management Accounting for
Costs & Control

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Assessment 1....................................................................................................................................1
1. Discuss panopticism and relevance to management accounting........................................1
2. Functions of management accounting................................................................................2
3. Usage of checklists as a control device..............................................................................2
4. Manufacturing and income statement................................................................................3
5. Labour cost and concepts...................................................................................................6
6. Material control account.....................................................................................................6
7. Accrued payroll account.....................................................................................................7
8. Payroll entries.....................................................................................................................8
9. Activity Based Costings.....................................................................................................9
10. Service department allocation of costs.............................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Management accounting is required in the organisation to initiate control over various
costs in effective way. Present report deals with various tools which are required in organisation
to control costs and achieve production quite effectually. Moreover, income and manufacturing
statements are prepared in this report.
Assessment 1
1. Discuss panopticism and relevance to management accounting
Panopticism is a French term given by Michel Foucault which means that internal
surveillance is made by the leader in the best possible manner. This is done by leader so that
behaviour may be extracted and modified. This term is a symbol of surveillance of the society. It
is quite simple technique to improve upon behaviour in effective way (Hu, Martinez and Yang,
2017). The diagram shows that leader sees many. This can be explained with context of
organisation. The leader sees employees so that performances may be observed and improved as
well.
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Illustrati
on 1: Panopticism Source: spacecollective.org

Panopticism is quite related to management accounting in the organisation. This is
evident from the fact that management is benefited by this information to take enhanced
decisions with much ease. This means that internal surveillance is made by management so that
employees may perform in effective manner and also operational activities are achieved quite
effectually. Management accounting information is utilised by top managerial personnels in
order to make firm stronger internally so that operations may be performed effectually and
desired objectives are accomplished as well (Cooper, Ezzamel and Qu, 2017). Thus, it can be
said that management accounting and panopticism are similar terms as surveillance is done to
make necessary improvements.
2. Functions of management accounting
The main functions of management accounting are as follows-
1. Planning
Planning is required in the company so that it may be able to achieve goals in effective
manner. The main tools for planning purpose are funds flow statement, cash flow statement,
marginal costing, absorption costing etc.
2. Decision-making
This is the main function of management accounting to make enhanced decision with
much ease. For taking decision, various information is gathered and provided to management
and as such, personnels assess company's performance to make further improvements if any.
This is useful to the company as it better decision is taken for making organisation internally
effective.
3. Controlling
Controlling is another effective function which initiates control over departments so that
budgeted results may be compared with actual ones and as such, corrective action may be taken.
This is essential for company in order to make improvements in effective manner (Objectives or
functions of Management Accounting).
3. Usage of checklists as a control device
The checklist is quite useful in reducing human errors and mistakes in order to improve
upon the same in effective way. This is required so that failure may be reduced up to high extent.
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