Value Chain in Manufacturing Accounting Contents Part 3: Cost 4 Segment of Value Chain 5 Purpose of Value Chain

Project Report: Manufacturing Accounting Contents Part 1 Estimation 3 Part 2 3 Introduction 3 Value chain4 Estimation of cost 4 Segment of value chain5 Purpose of value chain7 Conclusion 8 References9 Part 1: |calculation of the work in process | | | |Balance c/d |35000 |Finished goods (Transfer from finished|305000| |||goods ledger) || |Direct material|80000 |Balance c/d (Bal fig) |130000| |used || ||

Running Head: Management accounting
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Project Report: Manufacturing Accounting

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Contents
Part 1.................................................................................................................................3
Part 2.................................................................................................................................3
Introduction...................................................................................................................3
Value chain...................................................................................................................4
Estimation of cost.........................................................................................................4
Segment of value chain.................................................................................................5
Purpose of value chain..................................................................................................7
Conclusion....................................................................................................................8
References.........................................................................................................................9

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Part 1:
calculation of the work in process
Balance c/d 35000
Finished goods (Transfer from finished goods
ledger)
30500
0
Direct material used 80000 Balance c/d (Bal fig)
13000
0
Direct Labour
16000
0
Manufacturing OH
16000
0
43500
0
43500
0
calculation of the finished goods
Balance c/d 55000 COGS
30000
0
WIP (Bal fig)
30500
0 Balance c/d 60000
36000
0
36000
0
Working note:
Calculation of manufacturing
cost (80000+60000)*0.4/0.6
Cost of goods sold 420000-(420000*0.4/1.4)
Part 2:
Introduction:
In this study, the concept of value chain is analyzed according to the various concepts.
Basically, this report has been prepared according to a statement which depict about the
concept of value chain and various other factors which are related to the value chain. In this

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report, value chain, cost estimation, value chain segment and the main purpose of the value
chain has been analyzed.
Value chain:
Value chain is a common concept that lies over various operations and the activities
of a company to maintain and deliver the products and the services of best quality to the
customers (Miller and Mork, 2013). It helps a company to manage and assist into reducing
the level of the cost through managing the value of every product. For the value chain
analysis, it becomes important for a business to do market evaluation, provision analysis and
production identification for a better result of value chain. The value chain research is mainly
conducted by the companies to analyze the performance of the company and it also sets a
good relationship among various financial and non financial factors of an organization
(Fayard et al, 2012).
Normally, it is said that the value chain study is a kind of the framework and it is a
style of the management which primarily makes a focus over the real worth of the business.
Value chain motivates the people and the team to complete their assigned task properly and it
also takes a concern of the environment and the culture of the organization.
Value chain analysis is quite useful for every business to maintain and manage the
entire resources of the business and set them in such a manner that proper utilization of
minimum resources could be done. Through this study, it has been found that value chain
plays a crucial role in an organization to make a balance among various factors (Funk et al,
2010).
Estimation of cost:
Value chain is a framework to make a balance in the organization and set the process
of the business activities in such a manner that the issues of the business relates to the
process, cost and other activities could be solved in no time (Monczka et al, 2015). Through
this study, it has been found that the value chain could estimate the cost of a business through
using the following process:
a. Analyze the primary and secondary activities of the firm:
Value chain analysis evaluates the various activities of the company whether it is
primary or secondary to analyze the better result of the company. Managers of value

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chain department are required to make an abetter decision about the activities after
delivering the best work and the best process must be used to deliver the work (Miller
and Jones, 2010).
b. Establish the importance and cost of every activity of the firm:
The total cost of every product and services is different form each other and thus it is
required by the managers to analyze the cost of each activity, Value chain analysis
helps the management to identify that. The cost which occurred most of the time must
be looked firstly by the management team of the company.
c. Analyze the cost drivers for each cost:
It is required for the management to analyze the cost driver of each cost to analyze
and evaluate the better result about the company. Such as the labour cost must be
allocated according to the labour hour so that it becomes easy for the manager to
identify the total cost and unit per cost perfectly.
d. Identify and see the links among the activities:
At the next level, company analyzed and make a decision about the setting
relationship among various costs so that the way of cost reduction could be analyzed.
The identification among the activities and the cost would help the organization to
understand the improvement which could be done to reduce the level of the cost of the
company (Gereffin and Sturgeon, 2013).
e. Analyze the opportunities to reduce the level of the cost:
Lastly, managers and the company which handles the value management analyze the
various opportunities and choose the best one and implement that to reach over a good
conclusion. This would help the company to reduce the level of the cost and through it
the company would become more profitable.
Through this process, it has been analyzed that a value chain manager must be updated and
must be of initiative nature so that the opportunities could be grabbed by him or her at the
perfect timing.
Segment of value chain:

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Value chain is a framework which is categorised into various segments to conduct a
better strategy and the performance of the company. Through the analysis over the value
chain segment, it has been analyzed that mainly the value chain analysis has been divided by
the companies according to the primary activities and secondary activities. Following are the
activities of the company. Through the given chart, it has been analyzed that how the
company manages the value chain in a business.
(Hollensen, 2015)
Following are the ways through which company uses the above given activities in
such a manner that the assistance could be taken by the managers:
Inbound logistics:
Value chain analysis helps the logistics management of the company to perform the
business and the activities in a well manner while considering the cost factor as well.
Operations:
Value chain analysis helps the operation management of the company to perform the
activities of the business and the performance in a well manner while considering the cost
factor as well (Johnson and Templar, 2011).
Outbound logistics:

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Value chain analysis helps the logistics management of the company to perform the
business and the activities in a well manner while considering the cost factor as well.
Marketing and sales:
It assists the sales and marketing department of the company to analyze the situation
of the market and make a better deal on the basis of that.
Services:
Value chain analysis helps the service manager of the company to perform the
business and the activities in a well manner while considering the cost factor as well.
Firm infrastructure:
It assists the organization to set the infrastructure of the company perfectly and with
the help of the market and it also help them to reduce the level of the cost (Johnson, 2014).
Technology:
It assist the organization to adopt the new technology the activities of the company
perfectly and with the help of the market and it also help them to reduce the level of the cost.
Procurement:
Value chain analysis helps the procurement manager of the company to perform the
business and the activities in a well manner while considering the cost factor as well.
Human resource management:
It assist the organization to adopt the new policies and structure for the human
resource management of the company and it considers the employment and manpower factor
as well while making any decision (Gereffi and Frederick, 2010).
Purpose of value chain:
The study of value chain analysis has been done over Hawker Siddeley to analyze the
purpose of the value chain of a company. Through the analysis over the Hawker Siddeley, it
has been evaluated that the company used the analysis of the value chain to manage and make
a control over the performance of the company (Centi, Quadrelli and Perathoner, 2013).
According to the annual report of the company, it has been found that it becomes easy
for the company to maintain the figures according to the value chain analysis as it offers the

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highest result to the company and takes the consideration of the value chain in that. Company
has reduced the cost of the activities and operations through the value chain analysis, further;
it has also been found that the company add the worth of material used through various
processes by converting them into finished goods, the overall objectives f the value chain
department of the company is to deliver the highest value of the cost which is least and this
has also helped the company to get the competitive advantages (Baldwin and Venables,
2010).
The value chain department of the company takes the help of the value chain process
which is planning the vale chain activities, making the control over the value chain activities.
Through this process the company achieves its goals and targets. Value chain management
helps the company to get better result from the business and activities of the company.
Conclusion:
Thus through this study, it has been concluded that it assist the organization to adopt
the new technology the activities of the company perfectly and with the help of the market
and it also help them to reduce the level of the cost.

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References:
Baldwin, R. and Venables, A.J., 2010. Relocating the value chain: off-shoring and
agglomeration in the global economy.
Centi, G., Quadrelli, E.A. and Perathoner, S., 2013. Catalysis for CO 2 conversion: a key
technology for rapid introduction of renewable energy in the value chain of chemical
industries. Energy & Environmental Science, 6(6), pp.1711-1731.
Fayard, D., Lee, L.S., Leitch, R.A. and Kettinger, W.J., 2012. Effect of internal cost
management, information systems integration, and absorptive capacity on inter-
organizational cost management in supply chains. Accounting, Organizations and
Society, 37(3), pp.168-187.
Funk, C.A., Arthurs, J.D., Treviño, L.J. and Joireman, J., 2010. Consumer animosity in
the global value chain: The effect of international production shifts on willingness to
purchase hybrid products. Journal of International Business Studies, 41(4), pp.639-651.
Gereffi, G. and Frederick, S., 2010. The global apparel value chain, trade and the crisis:
challenges and opportunities for developing countries.
Gereffi, G. and Sturgeon, T., 2013. Global value chain-oriented industrial policy: the role
of emerging economies. Global value chains in a changing world.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson
Education.
Johnson, M. and Templar, S., 2011. The relationships between supply chain and firm
performance: the development and testing of a unified proxy. International Journal of
Physical Distribution & Logistics Management, 41(2), pp.88-103.
Johnson, P.F., 2014. Purchasing and supply management. McGraw-Hill Higher
Education.
Miller, C. and Jones, L., 2010. Agricultural value chain finance: Tools and lessons. Food
and Agriculture Organization of the United Nations and Practical Action Pub..
Miller, H.G. and Mork, P., 2013. From data to decisions: a value chain for big data. IT
Professional, 15(1), pp.57-59.

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Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing
and supply chain management. Cengage Learning.