Managerial Accounting Assignment Sample
Added on 2020-12-18
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ManagerialAccounting
Table of ContentsINTRODUCTION...........................................................................................................................1PART 1............................................................................................................................................11.) Types of cost discussed in the given case...............................................................................12.) Best alternative to purchase appliance....................................................................................23.) Cost that couple has to incur to launder cloths.......................................................................34.) Calculation of Franks additional employee............................................................................45.) The number of employee which is needed to be hired...........................................................5PART 1............................................................................................................................................61.) Management accounting system in Canon Inc. and Apple computer Inc..............................62.) Contribution of management accounting to innovation process............................................73.) Specific lessons from article research....................................................................................7CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTIONManagerial Accounting is a process in which managers identify, analyse, measure,interpret and communicate the information in order to achieve the organisational goal. It is alsoknown as a cost accounting. It focuses on all different field of accounting period which aims atproviding information about the business operation metric to higher level of management.Managerial accountant uses these various information which is related to various costassociated with products and services purchased by the company. In order to understand theconcept of managerial accounting a business of Nanna's House is taken. It is a child carebusiness started by Douglas and Pamela. This report contains the detailed information about thevarious types of cost and the components of managerial accounting. It also contains thedetailed analysis of that how managerial accounting helps in contributing towards theinnovation process and the various outcomes which are learned from the research finding aboutarticle. PART 11.) Types of cost discussed in the given caseA cost is known as the amount which an individual or company has to incur in order toget something in return. In term of business cost is basically the monetary value of material,effort, resources, utilities and time which are consumed, various risks incurred and the forgoneopportunity in the production and delivery of services and goods (Fahlevi, 2016). Followingare the three types of cost which are being discussed in the given case:Fixed Cost: Fixed cost is a cost which is incurred by any business organisation whichdoes not change due to the increase or decrease in number of goods sold or produced, thesecost tend to remain constant at every level of production. It is classified as an operating cost forthe business as it can not be avoided by company irrespective of the level of sales. Fixed isgenerally used in break even analysis in order to determine the price for the good and the levelof production and sales on which company does not earn any profit or incur any loss. In theabove given case it is stated that child care business started by Douglas and Pamela it incurredvarious fixed cost such as fixed annual insurance of $3840, the overall cost associated withwasher and dyer is $420 and $380. the total cost of delivery of the appliances is to be fixed at1
$35 and the installation cost which the couple has to incur is $43.72. The cost of mileage wasstated at $0.56 per mile after the fixed price which is applicable to 6 mile in a two way journey.Variable Cost: A variable cost is a cost which is incurred by a business organisationand it changes in the proportion of the number of good or services produced by a businessorganisation (Granof, and et. al. 2016). In the above given case of Child home care business thevariable cost is the monthly charges for the child care service provided by them which is $800per month per child and it may vary as per the number of children availing its service. Itsvariable cost also includes the cost per hour which an individual has to pay if it come after 4PM the additional cost is $15 per hour. Addition to that Douglas and Pamela also provides thesnacks and meal at a cost of $ 3.20 per child. The cost of laundry is also included in thevariable cost as it changes on the number of weeks, cost of laundry per week is $8.Semi Variable Cost: Semi Variable cost is the cost which is to be incurred by anybusiness organisation. This cost consists of both variable and Fixed cost, in this type of costone portion of a cost is fixed that is it cannot be changed and company has to incur those evenwith zero production whereas the other part is variable and is changes as per the proportionatechange in the level of good or service produced. In the above given case scenario of Nanna'sHouse, semi variable cost which is to be incurred by them is the hiring of new employees. Oneemployee can take care of maximum of 3 children and if the number of children increase to 4they had to hire 2 employee and if they want to expand their total capacity to 14 it have to hire3 new employees which can be considered as a semi variable cost.2.) Best alternative to purchase applianceThere are various information which can be considered in the decision making processas it helps to outline the necessary things should be in mind while taking any decision.Relevant information is very important as highlights the various points which should be kept inmind while taking any decision (Koester, Shevlin, and Wangerin, 2016). In the above givencase company has to purchase an appliances which would help Nanna's House to launder thecloths. This appliance will be used as an assets for the company as it will be used to provide thelaundry service for the children who will be availing the service of child care the relevantinformation which is necessary for decision making process is the total cost of procurement ofthe asset and the cost required for it installation. The useful life of an assets is also an importantinformation which is relevant and the rate of depreciation and the method through which it is2
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