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Managerial Accounting- Doc

   

Added on  2021-01-02

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Managerial Accounting

Table of ContentsINTRODUCTION................................................................................................................................3Main body........................................................................................................................................3(a): Discussion about Activity based costing (ABC)................................................................3(b): Reason for the selection of both the journal articles......................................................5(c): Similarities and variation in both the journals.................................................................8(d): Research findings.............................................................................................................9CONCLUSION..................................................................................................................................10REFERENCES...................................................................................................................................12

INTRODUCTIONManagerial accounting is an integrated part of the management process andaccountants are significant strategic partners in strategic formulation within an organisation. Itis known as one of the effective process of identifying, measuring and evaluating the data inpursuits of an organisation aims and objectives. Managers used to examine information of lastyears to form strategies for future events and managerial accounting assist them to provideright data to work effectively. For this project report, chosen topic is Activity based costing onthe basis of that two important journal article such as “accounting, auditing and accountability”and “Management accounting research” is taken into account. “Nexia Australia Pty Ltd" isselected for this project as, it is operating in an accountancy and consulting firm which is havingthe skills and experience to deliver effective solution to their customers. This report consists ofexplanation of the chosen topics, research question and difference in both the selected articles.Apart from this, essential outcomes from the two analysis that will be useful for themanagement of the company in near future is being covered under this report (Bensonand et.al., 2015).Main body(a): Discussion about Activity based costing (ABC)In every business organisation, it has been found that most of the manager of financialanalyst uses various costing methods in order to manage and control their stock related issues.Administration of an organisation can easily be able to measure growth and failure of thebusiness through evaluating various report that are prepared by Nexia Australia Pty Ltd (DeWaal, 2013). ABC costing is considered as the particular types of cost accounting method. The innerfocus of management accounting similarity with the financial accounting, whose complete aimis based on external sources. Activity based costing has two major elements, cost measure andperformance measures. ABC costing is used to measure the total cost and performance ofactivities, resource and objects (Gitman, Juchau and Flanagan, 2015). Under this system anactivity can be said that any particular action or results that is a cost associated with cost drivingforces which is been used to mention as allocation based. The basic concepts of this ABC3

costing is that all the activities consume resources to produce an output. Expenses must beseparated and coordinated with the level of activity spent as resource while the productionprocess. Basically, the expenditure that are required to manufacture individual units of specificservices or product would be segregated from one another. In Nexia Australia Pty Ltd, ABCcosting is used to examine assigned cost to activities those are associated with the overheads.After determining the similar costs that are assigned to the related product, productionmanagers used to record the total cost and expenses they are incurred during the production ofone unit (Maskell, Baggaleyand Grasso, 2016). It will assess the manager as well as the financial manager of Nexia Australia Pty Ltd tomake improvement in their costing procedure in many ways through increasing the totalnumber of cost that can be imposed on to bring together various overhead costs, creating newbases for distribution of costs that are associated with activities, various nature of indirectcosts. ABC costing assist the accountants of Nexia Australia Pty Ltd through providing themvaluable data of each activity individually (ABC, 2017). It would facilitate their work to examinevarious types of costs for every action that are taken within an organisation. The best part ofusing the managerial accounting techniques is used to determine and improves that accuracy ofproducts and assist the manager to evaluate the ways in which resources are used within anorganisation (Saadi Halbouniand Kamal Hassan, 2012). It will be more effective while forming valuable strategic decision in near future time formanaging their stock related issues. Before implementing this particular system, the NexiaAustralia Pty Ltd have to make sure that all the benefits and also the current runningtechnology in the market are needed to be analyse regarding the use of inventorymanagement. It may lead the accountant and financial officers towards formulating effectivelystrategy that would be most cost reduction for the company. The rates of implementing activitywhich are need for implementation of activity based costing was continuously enhanced inAustralia in past 1990, but it has started to decrease after 1994. The charted accountant usedto suggest the organisation to adopt this costing methods within an organisation. The managerhas to follow six basic steps while formulating activity based costing (ABC) within anorganisation. These steps are considered as initiation, adoption, acceptance, routinisation,4

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