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Management Accounting - Sample Assignment

   

Added on  2021-05-31

11 Pages2552 Words29 Views
Finance
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Management Accounting1
Management Accounting - Sample Assignment_1

ContentsIntroduction......................................................................................................................................4Activity based Cost Model..............................................................................................................5ABC Model in accordance with the goals and strategies of MYOB Group Ltd. Mission andobjective of MYOB Group Limited................................................................................................6Recommendations-..........................................................................................................................9Another Management Accounting Tool suitable for the use of MYOB Group Ltd......................10Conclusion.....................................................................................................................................11References......................................................................................................................................122
Management Accounting - Sample Assignment_2

IntroductionActivity-based costing is a technique that has been widely used by many businesses inorder to find out the actual utilization of resources, It is mostly used in the manufacturingbusinesses. It has been proved as very beneficial in increasing the efficiency of the business. Itdeals with the utilization of the resources in the production activities. It can give good results inservice industry too if it is applicable in an efficient way. Below study is based on anorganization named MYOB Group Ltd. It is a big Australia based multinational company and itbelongs to the technology industry. This company is involved in providing software-relatedservices to small, mid-size as well as big companies. It provides different software that helps inbusiness management like management of payroll, payments, retail, tax solutions and CRM.There are different benefits of ABC model that has been described in the below study. Itprovides benefits by assessing the vision, mission, objectives and strategies of MYOB. It alsoprovides some recommendations for the benefit of the organization.3
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Activity-based Cost ModelABC costing refers to Activity-based costing. It basically deals with costing of differentthings in a production process. It basically helps in keep a tracking of resources used and the costof the production. There are different activities involved in the production process and aparticular cost is assigned to each of them. This costing has been widely used in calculating allthe overhead expenses and the cost to the extent of revenue. It starts with identifying theactivities involved in the business and then allocates a cost and resources to each of them. Itassists in the initiation of activity to produce the outputs. The effective cost that has been utilizedin the production process in a particular time period is known as activity cost. It basically dealswith indirect costs. ABC costing only works when the model is totally based on the businessactivities and the cost involved in the same. These costs are incurred in the manufacturing orproduction process of goods or services. It is necessary to find out the estimation of the fundsrequires in production activities, so this model is perfectly suitable for the same (Wink andCorradino, 2011).Features of Activity-based costingThere are mainly two types of cost involved in the business activities according toactivity-based costing. These two costs are fixed costs and variable costs. Fixed costs are the costthat remains fixed irrespective of the units of production and it is incurred on a fixed basis for aparticular business. Even if there is no production activities are going on, this fixed cost willremain the same. E.g. Rent, electricity bill and wages of labour. Variable cost is a cost thattotally depends upon the production activities and a number of units produced. This cost variesaccording to the production activities like maintenance cost and diversification costs. This costhelps in the improvement of the quality of the products as well as the design of the product(Mohamed EL-Shishini and Upadhyaya, 2018).It helps in the identification of cost drivers for each type of activity. A cost driver is a partof the activity that utilizes the maximum cost in the manufacturing process. This model providesa tracking support for the cost involved in the activities that are very beneficial for the business4
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