Management accounting Assignment PDF

TRAN DANG BAO TRAM _ 10190651 _ MA2.1

A. INTRODUCTION
Management accounting (MA) is a method of giving financial data and information to
managers for use in making decisions inside a company. A corporation may make the
best option to handle any problem by using MA methodologies and tools. This
research examines the strategies of two companies, Coffeegreen and Galaxy, in order
to assess their expenses, financial aspects, and accounting management procedures.

B. MAJOR FINDING
I. SCENARIO 1:
Question 1: Advantages and disadvantages of planning tools for Coffeegreen
a, Definition
Standard costs: is an essentrial subtopic of cost accounting. Standard costs have
historically been connected with the expenses of raw materials, direct labor, and
manufacturing overhead in a manufacturing organization (Accounting Coach,
n.d.).
Standard price: is the price per unit of input that has been precisely calculated
(Horngren, C.Datar.M. & Rajan.M., 2015).
Budget: is a forecast of revenue and spending for a certain future period of time
that is generally prepared and updated on a regular basis. Budgets may be created
for an individual, a group of individuals, a company, a government (Investopedia,
2021).
Balanced Scorecard: The BSC framework is built on a balance of leading and
lagging indicators, which may be thought of as the drivers and results of your
company's objectives, respectively. These important indicators, when utilized in
the Balanced Scorecard framework, tell you if you're on pace to meet your
objectives and if you're on track to meet future objectives (Jackson, n.d.)
b, The advantages and disadvantages of each planning tool
PLANNING TOOLS ADVANTAGES DISADVANTAGES
Standard cost Improved cost control:
establishing standards for
each type of expense
incurred, then highlighting
exceptions or variances—
cases where things did not go
as planned.
More useful data for
managerial planning and
Contentious materiality
limits for variances: Each
organization's management
must establish different
material limits, which may
result in process conflicts or
problems.
Non-reporting of some
variations: Employees may

decesion making: preparing
precise budgets and assessing
costs in order to bid on jobs.
Costs of production could
be reduced: Employees may
become more cost conscious
as a result of standard costs,
and seek out better ways to
complete their tasks.
not disclose or seek to
mitigate unfavorable
expenditure exceptions in
order to conceal inefficiency
and reduce budgeting
effectiveness.
Maybe low moral with some
employees: Low
performance often receives
more attention than high
performance because
management focuses on
unfavorable variances and
ignores favorable variances.
(course.lumenlearning.com, n.d.)
Standard price Selecting the best vendors:
Choosing the most
appropriate suppliers based
on price and material quality.
Adding more advantages:
Increasing last revenue by
lowering input costs is
possible.
To set aside funds for risk:
Provide background
information and data on how
to build an emergency fund
by fixing prices. • The
entry cost can be easily
controlled by the company.
It is a difficult situation to
deal with.
It was necessary for the
company to have extensive
knowledge of the market and
industry.
(Blocher, Stout, Cokins, 2010)
Budgets Increasing the likelihood of Employees frequently strive

meeting the goals and
objectives.
Better communication
between the company's many
departments.
By taking possible corrective
action, conflicts and problems
can be avoided.
By tying individual goals to
employee motivation,
company can boost
productivity.
to meet budgets while staying
within them.
Flexibility is reduced.
Staffs may become
demotivated if budgets are
too difficult or easy to meet.
(febmat.com,2016)
The balanced score
card
Make business strategy
more structured: Creating a
clear structure that will serve
as the benchmark against
which all employees will be
judged
Facilitate communication
Connect people to the
company's objectives: "Keep
an eye on the prize" that adds
advantages to the company.
A lot of data is required:
Managers and team members
are required to report
information on a regular
basis, which is both tedious
and time consuming.
Complication can occur:
There are a lot of resources
and case studies to read, and
there are a lot of different
ways to use this approach.
(Heartpace,2020)
Question 2:

24 tons = 24,000 kg ; 15 tons = 15,000 kg ; 4 tons = 4,000 kg
THE COST OF THE CONTRACT NO. 348
Coffee bean costs = $2/ kg * 1.4 kg = $2.8
Direct labour cost = $5 per hour * 0.6 labour cost = $3
Predetermined overhead rate = 100% * $3 = $3
Overhead cost per unit = $3
Allocated overhead in March = $3 * 24,000 = $72,000
Actual overhead for March 2021 = $70,000
Overallocated overhead accounted for
cost of goods sold
= $72,000 - $70,000 = $2,000
Number of goods sold = 24,000 kg – 4,000 kg = 20,000 kg
Cost of goods sold per unit = $2,000 / 20,000 kg = $0,1
The cost of the contract no.348 = ($2.8 + $3 + $3 - $0.1) * 15,000 kg = $130,500
THE STANDARD COST FOR 1 KG OF COFFEE
Coffe bean costs = $2/ kg * 1.4 kg = $2.8
Direct labour costs = $5 per hour * 0.6 labour cost = $3
Predetermined over rate = 100% * $3 = $3
Overhead cost per unit = $3
The standard cost for 1 kg of coffee = $2.8 + $3 + $3 = $8.8
THE SELLING PRICE THAT HELPS COFFEEGREEN LTD. MAXIMIZE ITS REVENUE IN
2021
Quantity demanded (kg) Selling price ($) Revenue ($) = Quantity demanded * Selling price
300,000 10 = $ 3,000,000
280,000 11 = $ 3,080,000
250,000 12 = $ 3,000,000
240,000 13 = $ 3,120,000
200,000 14 = $ 2,800,000