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Management Accounting Assignment Solved

   

Added on  2020-09-08

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ManagementAccounting(Project-2)
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Table of ContentsINTRODUCTION...........................................................................................................................1TASK 2............................................................................................................................................1P3: Application of cost analysis techniques for formulation of income statement.....................1M2: Application of management accounting techniques regarding financial reporting.............3D2: Merits and demerits of Marginal and Absorption costing...................................................3TASK 3............................................................................................................................................4P4: Merits and demerits of different planning tools used for budgetary control........................4M3: Estimation of expenses if change in number of hours.........................................................6TASK 4............................................................................................................................................7P5: Application of different management accounting systems to respond financial issues........7M4: Contribution of management accounting to improve financial performance......................8D3: Application of planning tools to reduce financial issues to achieve success.......................8CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10
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INTRODUCTIONManagement accounting is the process of preparing financial statements and reportswhich help in identifying the actual financial position of company. The management needs tomake an effective decision regarding ascertainment of cost of manufactured product throughadopting marginal and absorption costing. Absorption cost methods help in determining the totalmanufacturing cost including fixed and variable. It is a profession which managers need to usetheir skills and knowledge to make an effective decision and suitable planning related withmanaging and controlling all business activities performed in future. UCK furniture deals inmanufacturing table and drawer related furniture products (Abdel-Maksoud, 2011).The project covers the various planning tools which are used to control budget along withtheir merits and demerits. Adoption of marginal and absorption costing method whileascertaining cost of product are also explained under this report. The project also summarizes thevarious accounting systems to resolve financial problems.TASK 2P3: Application of cost analysis techniques for formulation of income statementCost: It may define as the amount of value which is incurred by an organization to producesomething. It includes the materials cost, labour cost, overhead expenses, risk, time etc. afterdetermining all such aspects the manager can able to decide to set an effective price for theirproduct. Cost can be of two types which are as follows:Fixed and variable cost: Fixed cost refers to such cost which never changes with changesin level of output thus remain constant. Rent and depreciation are such two example of fixedcost. Whereas Variable cost refers to such cost which changes with the changes in level ofoutput. Such cost has direct relationship with production. Raw material, labour are the examplesof variable cost (Akbar,2010).Opportunity and outlay cost: Opportunity cost refers to the benefit the company can attainbut sacrificed due to implementing another course of action. Whereas outlay cost refers to thecost which are incurred in the purchasing of machinery and its installation in an organization.Difference between Marginal and Absorption costing1
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