Strategic Management Accounting Assignment - Solved
Added on 2020-10-22
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Strategic ManagementAccounting
Table of ContentsINTRODUCTION...........................................................................................................................1QUESTION 2...................................................................................................................................1a. Columnar statement.................................................................................................................1b. Sub division of labour and material variances........................................................................1c. Identification of possible causes of material and labour variances.........................................1QUESTION 3...................................................................................................................................1QUESTION 4...................................................................................................................................3(I) Balance score card..................................................................................................................3(ii) Benchmarking.......................................................................................................................4CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................6APPENDIX......................................................................................................................................7a. Columnar statement.................................................................................................................7b. Sub division of labour and material variances........................................................................7
INTRODUCTIONStrategic management accounting is branch of management accounting which focus onthe information i.e. related to the external factors of an organisation. This process combinesmanagement information with strategic business objectives. In this project report, various casescenario are evaluated in order to have a better understanding towards several accountingconcepts. Budgets such as fixed, flexible and actual are developed in order to ascertain variancesfor direct material and direct labour. Two transfer pricing methods are evaluated along with theiradvantages and disadvantages. The main aim of this project is to examine various accountingtechniques such as balance scorecard and benchmarking along with their suitable formate whichis appropriate for the given scenario.QUESTION 2a. Columnar statementRefer appendixb. Sub division of labour and material variancesRefer appendixc. Identification of possible causes of material and labour variancesCauses of variation in material price, variance are fluctuating in market price, purchasesof non standardised material, delivery costs, emergency purchases etc. and cause of changes inmaterial usage ,variance are in quality of material i.e. low, careless handling, excessive wastageetc. In this case, there is difference between the budgeted production quantity and actualproduction quantity which is 2000 units and 18750 units. The price of material fluctuated from24 to 23.4, possible causes of these changes in labour variance is due to abnormal overtimebelow or above standard rates because of emergency operations. In this case, the labour hourschanges from 12 to 12.53, variable production overhead varies from 3 to 3.07.QUESTION 3Transfer pricing – Transfer pricing refers to the set of rules and regulations which aredeveloped for the pricing transactions within an organisation. According to this process, anenterprise sets an arrangement for the prices of goods and services. This concept is used byvarious companies in order to transfer products between different departments or subsidiary1
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