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Management Accounting - Jeffrey and Sons Ltd.

   

Added on  2020-01-07

20 Pages4687 Words70 Views
Managementaccounting
Management Accounting - Jeffrey and Sons Ltd._1
TABLE OF CONTENTSIntroduction......................................................................................................................................3Task 1...............................................................................................................................................31.1 Classification of different types of cost.................................................................................31.2 Computation of unit cost and total job cost for Job 444........................................................41.3 Calculation of the cost of Exquisite using appropriate techniques........................................41.4 Analysis of cost data of exquisite using appropriate techniques...........................................8Task 2...............................................................................................................................................82.1 Preparation and analysis of the cost report for the month of September...............................82.2 Use of several performance indicators in order to identify area for further improvement..102.3 Recommendations for reduction of cost and enhancement of value and quality................10Task 3.............................................................................................................................................113.1 Purpose and nature of budgeting process............................................................................113.2 Selection of appropriable budgeting methods in accordance with the needs of organization...................................................................................................................................................113.3 Production and purchase budget..........................................................................................113.4 Preparation of cash budget...................................................................................................12Task 4.............................................................................................................................................144.1Computation and analysis of variances................................................................................144.2 Operating statement for reconciliation of budgeted and actual results................................164.3 Variance analysis report.......................................................................................................16Conclusion.....................................................................................................................................17References......................................................................................................................................182
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INDEX OF TABLESTable 1: Statement showing total and unit cost of Job 444.............................................................5Table 2: Statement showing computation of total cost of exquisite................................................5Table 3: Allocation of cost of support departments on the basis of machine hours........................7Table 4: Allocation Criteria of cost ...............................................................................................8Table 5: Units to be produced .........................................................................................................8Table 6: Statement showing computation of exquisite....................................................................8Table 7: Statement showing computation of exquisite....................................................................9Table 8: Production budget of Jeffrey and Son ...........................................................................12Table 9: Material purchase budget of Jeffrey and Son's ...............................................................13Table 10: Cash budget of Jeffrey and Son's...................................................................................133
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INTRODUCTIONManagement accounting is used in business to provide accurate and reliable informationto the managers so they can make viable decisions for their growth and success. Approaches ofmanagement accounting consists of strategic, performance and risk management (Burns and et.al, 2004). Present report foucues on case study of Jeffrey and Sons Ltd. In this report descriptionwill be provided regarding theoretical and practical application of various costing approaches byconsidering information of provided business. Further, cost report will be prepared in order toprovide recommendations to the company for resolving current issues by making improvementin their operational strategies. TASK 11.1 Classification of different types of costCost can be defined as expenses incurred by business in order to attain an economicbenefit for business. In a business, cost can be bifurcated on the basis of following aspects:On the basis of element: According to the factor of element, cost can be segregated indirect and indirect cost. Direct cost is incurred for the production activities while indirectcost is incurred for attaining value added benefits (Jiambalvo, 2001). Example of directcost is raw material and labour and of indirect cost is rent and lightning expense. On the basis of function: Cost can also be bifurcated as per functional activities of abusiness organization. General classification of the cost on the basis of function areadministration, distribution, production, advertising, research and development andselling.On the basis of nature: As per the nature, cost can be classified into material, labour andexpenditure of overhead. Material expenses are incurred for the purchase of goodsrequired for production activities (Keown, 2005). Labour cost is incurred for the paymentof wages and salaries to the employees for services provided by them. On the basis of behaviour: By considering behaviour as a factor, cost can be bifurcatedinto fixed, variable and semi-variable cost. Fixed cost are those expenses which does notalter with the change in production units (Kont, 2013). Example of fixed cost is salary,rent and depreciation. Variable cost is just opposite to the fixed cost as it is in direct4
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