Management Accounting Portfolio and Analysis

MANAGEMENT
ACCOUNTING PORTFOLIO
AND ANALYSIS

TABLE OF CONTENTS
PART A...........................................................................................................................................3
1 Incremental Columnar report for Coyle company....................................................................3
2 Recommendation to Coyle company........................................................................................3
PART B............................................................................................................................................4
Incremental Analysis of the Southern Division. .........................................................................4
REFERENCES................................................................................................................................6

PART A
1 Incremental Columnar report for Coyle company
Incremental analysis report
Particulars Cost per unit Make Buy
Incremental –
Increase/(Decease)
Purchase 11 88000 -88000
Direct materials 5.625 45000 45000
Direct Labour 1.5 12000 12000
Variable
manufacturing
overhead 1.25 10000 10000
Fixed
Manufacturing
overhead 1.875 15000 -15000
Total Relevant
Cost 10.25 82000 88000 -36000
Particulars Make Buy
Incremental –
Increase/(Decrease)
Relevant Cost 82000 88000 -6000
Opportunity cost 20000 22000
Total costs 102000 -16000
2 Recommendation to Coyle company
Incremental analysis is also known as relevant cost method as it focuses over relevant
costs associated with project and ignores the sunk cost. Buy or make analysis is used for
analysing difference to make product within the organisation or to buy it from outside suppliers.
Managers of the company have to decide whether firm will be profitable or not. The method is
used for measuring results of operations and also identifying relevant revenues and cost that will
be incurred associated with the alternative decisions (Fernando and Hermawan, 2019). In the