Management of Accounting Assignment - Value Chain Analysis and Overhead Allocation

Management of accounting assignment

Table of Contents
Introduction......................................................................................................................................4
Question 1........................................................................................................................................4
Part A...........................................................................................................................................4
Part B...........................................................................................................................................5
Question 2........................................................................................................................................8
Estimated allocation rates for fixed and variable overhead for the current period......................8
Computation of total overhead cost allocated to Job 20 in October............................................9
Computation of total cost of Job 20.............................................................................................9
Calculate the amounts of fixed and variable overhead allocated to jobs in October...................9
Selection of the cost pool...........................................................................................................10
Question 3......................................................................................................................................10
Identification of the cost pool and assignment of cost..............................................................10
Determination of the cost driver for each cost pool..................................................................11
Computation of the allocation rates for each cost pool and cost driver.....................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

LIST OF TABLES
Table 1 calculation of the allocation rate for predicted variable and fixed expenses......................9
Table 2 Statement of the allocation rate..........................................................................................9
Table 3 Computation of total overhead cost for Job 20.................................................................10
Table 4 Computation of total cost for Job 20................................................................................10
Table 5 Computation of the Fixed and variable cost for the job...................................................10
Table 6 Allocation of cost..............................................................................................................11
Table 7 Statement showing allocation rates..................................................................................12

Introduction
A company can analyze its internal strength with the help of value chain analysis technique. The
given study is related to the value chain analysis of the company named as Medibank Private
Ltd. Further, this report also shows the method of allocation of the overhead as per the job
costing system. Moreover, various aspects related to the determination of the cost pool, cost
driver and allocation of cost is presented in this study.
Question 1
Part A
Concept of Value Chain
For achieving an enduring competitiveness, high-quality products are offered by the organization
in the business climate. For obtaining the business objectives, it is important for the organization
to match and after that exceed their opponents. It also discloses the needs of the clientele and
finds a way to satisfy them (Winans, Kendall, and Deng, 2017). Value chain analysis proposes
the organized sight of organization which is made of several stages in addition to inputs and
outputs of every different phase. Value chain analysis is completely based on the essential fiscal
principle of advantage. Best opportunities are grasping by the organization by working in a
segment where they have a comparative, more productive advantage in compare to their
participant (Simatupang, Ginardy, and Handayati, 2018).
Benefits of Value Chain Management for business
There are various advantages of business chain management in the organization like it improves
the flow of products and materials, there is a faultless flow of information and also there is an
improved flow of finances.
The Improved Flow of Materials and Products
The flow of product is essential to manage to satisfy the need of the customers in an appropriate
time. As soon as the products are provided to the end-user, the more efficient will be the flow of
product. Besides, that, different factors must be considered like the quality of materials as well as