Managerial Accounting

Running head: Managerial Accounting
Managerial Accounting
Name of the Student
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1Managerial Accounting
Table of Contents
PART A.........................................................................................................................3
Question No 1...........................................................................................................3
Question No 2...........................................................................................................4
Question No 3...........................................................................................................5
Question No 4...........................................................................................................7
Question No 5...........................................................................................................8
PART B.........................................................................................................................9
Question No 1...........................................................................................................9
Question No 2.........................................................................................................10
Question No 3.........................................................................................................11
References and Bibliography.....................................................................................13

2Managerial Accounting
PART A
Question No 1
Costing is the most important part for any organization as this help them to
know the cost of the product they use so this help them to estimate the purchasing
power of the company(Cooper 2017). As in the given case study there are many
types of cost have been discovered and the three types of the cost which are been
stated in the case study are listed below:
1. Fixed cost – The first cost which is been discussed among the case
study is the fixed cost. Fixed cost are the cost which are fixed
irrespective of the production and sale of the product. These cost
always remain fixed and the company have to pay it even when they
do not sale any product in the market(Dale and Plunkett 2017). These
cost remain same even when the activity level of the company
increase or decreases. Example related to these cost is the annual
fees of the licence and the insurance cost. As these cost will be remain
fixed even after there is a change in the total activity level of the
company.
2. Variable Cost – The second cost which is given in the case is the
variable cost. Variable cost are the cost which changes with the
change in the activity level as if the activity level increase or decrease
so it will also increase or decrease (Fullerton, Kennedy and Widener
2014). This are the sum of the marginal cost and it’s also consider a
part of total cost. The variable cost in the given case is the cost which
they charge per child as if its charge for per person so if the child
increase than the cost of the fee related to the child is also increased.

3Managerial Accounting
3. Marginal Cost – The third cost is the marginal cost which is there in
the case studies. It is the increase in the total cost by an incremental
increase in the total cost, it can be classified as the additional cost
which the company have to pay in regards with the additional
production. In the given case as the company provides its services
from 8 am to 4 pm so of any one more than that than additional $15 is
charge for each additionally hour so this is been termed as marginal
cost as it is the additional hour so the additional pay can be termed as
marginal cost.
Question No 2
The information which is been provided in the case study which are relevant
in regards with the purchase of appliance is that the all the alternative which are
given are necessary in order to make the decision regarding the purchase of the
appliances as it gave all the three alternative to the company so that it can easily
know and make their decision regarding the product as first option give detail of
doing the outsourcing of the laundry services at a reasonable cost and giving all the
responsibility of the laundering to other. In the second option it give details about the
self-laundering service as in this the company have to travel and perform the service
and also it have to purchase additional products in order to complete the laundering
service. In the third alternative it had given the option that the company should invest
and purchased the appliances and can use as per their requirement this required a
huge amount of capital expenditure. So all these are the relevant information which
was given in the case study in regards with the appliance required by the company.
The information which are very irrelevant in regards with the purchase of
appliances is that the cost of the appliance which was given in the case studies as it