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Managerial Accounting Assignment (Solution)

   

Added on  2021-05-31

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Running head: MANAGERIAL ACCOUNTINGManagerial AccountingName of the Student:Name of the University:Author’s Note:Course ID:

1MANAGERIAL ACCOUNTINGExecutive Summary:In this report, evaluation is made regarding the various aspects related to activity-based costing (ABC) system comprising of its characteristics, enforcement and others fromthe company perspective. For satisfying the report criteria, ABC system is associated withIntegral Diagnostics Limited listed in ASX, since it is highly valuable for enhancingmanagement accounting approach of the higher management of the organisation. In case ofIntegral Diagnostics Limited, ABC model could play a significant role by detecting thoseparticular business activities, which need special attention and evaluation. Depending onthis analysis, it would be helpful for the stated organisation to allocate costs to the activitiesthat are rendered mostly to the customers. Finally, budgetary control could be used in theform of alternative management accounting technique so that the overall cost efficiency ofIntegral Diagnostics Limited is increased.

2MANAGERIAL ACCOUNTINGTable of ContentsIntroduction:..............................................................................................................................3Answer to Part a:........................................................................................................................3Answer to Part b:.......................................................................................................................5Requirement i:........................................................................................................................5Requirement ii:.......................................................................................................................6Requirement iii:......................................................................................................................6Answer to Part c:........................................................................................................................8Answer to Part d:.......................................................................................................................9Conclusion:...............................................................................................................................10References:...............................................................................................................................12

3MANAGERIAL ACCOUNTINGIntroduction:This report intends to evaluate the various aspects related to activity-based costing(ABC) system comprising of its characteristics, enforcement and others from the companyperspective. For satisfying the report criteria, ABC system is associated with IntegralDiagnostics Limited listed in ASX, since it is highly valuable for enhancing managementaccounting approach of the higher management of the organisation. It is a healthcareservice provider of diagnostic imaging services, medical specialists, general practitionersalong with allied health professionals and patients in Australia (Integraldiagnostics.com.au2018). Effort has been made in aligning the ABC system with the goals and strategies if theorganisation for enhancing its management accounting system. Finally, effectiverecommendations have been provided to enforce the system within the organisation alongwith identifying another suitable management accounting tool based on the departmentalneeds. Answer to Part a:One of the significant costing methods is the ABC system and it involves identifyingthe activities conducted during the business operations based on which the products areassigned with indirect costs (Al-Sayed and Dugdale 2016). Moreover, emphasis is placed onthe association among costs, products and activities for apportioning the indirect costs toproducts with less subjectivity as opposed to the conventional costing system. However, themanagers find it complicated in apportioning few particular costs through the ABC systemand these include indirect expenses like office staff salaries and this cost could not beapportioned easily to the manufactured product. As a result of this, popularity of the ABC

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