Role of Cost Control in Managing the Production

Added on -2020-02-18

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Role of cost control in managing the production - Assessment item 2
Management accounting Cost &
control
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Role of cost control in managing the production - Assessment item 2
Table of Contents
Solution 1 Job costing....................................................................................................... 3
Solution 2 Process costing.................................................................................................. 6
Solution 3 - Joint costing - decision making..........................................................................10
Solution 4 Variance analysis............................................................................................. 12
Solution 5 Budgeting...................................................................................................... 16
Bibliography................................................................................................................ 19
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Role of cost control in managing the production - Assessment item 2
Solution 1 Job costing
Predetermined Overhead Rate = 12,000
3,000
4.00 per Direct Labour hour
Direct Material
Control
15055 3210
6155
7000
25000
28210 28210
Work In Process
6700 30110
3210
14800 1200
14800 7000
1200
39510 39510
Finished Goods
8790 30000
30110
8900
38900 38900
Accounts Payable
6700 2345
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Role of cost control in managing the production - Assessment item 2
1800 6155
(Purchase of Direct
Material)
8500 8500
Cost of Goods Sold
30000
The great Pyramid of Giza if would have constructed now it would have tough to reconstruct the
pyramid even after presence of modern technologies and machinery. It took around 20 years in
the past around 4500 years back to complete the structure. According to the experts and civil
engineers it would take around $5 billion in the present terms to complete the structure.
According to the accurate data of the structure the pyramid is around 756 feet in length and 481
feet in height. The pyramid was originally built with the help of around 4000 workers in a time
span of 20 years but now with the advanced technology and availability of cranes and helicopters
it would be completed in 5 years time and would take around 1500 to 2000 workers help.
However economist do not find economical to build such a structure in present time due to cost
benefit analysis. The same cost if would have incurred in constructing a building then it would
have resulted in better outcome and facilities for the public. While making comparison the One
World Trade Centre was constructed within the lesser cost if it would have incurred to develop
Giza Pyramid (Wolchover, 2012).
Cost benefit analysis
Cost incurred in building
Pyramid of Giza - $5 billion
One World Trade Centre - $4 billion
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