Management Accounting

This study material for Management Accounting covers topics such as total period cost, cost behavior, cost of goods sold accounts, and calculation of overhead rates. It provides in-depth explanations and examples to help students improve their understanding of these concepts.

Management Accounting

Contents
WEEK 1......................................................................................................................................................4
Total Period cost......................................................................................................................................4
WEEK 2......................................................................................................................................................4
Yang’s total cost......................................................................................................................................4
WEEK 3......................................................................................................................................................5
Cost of goods sold accounts....................................................................................................................5
WEEK 4......................................................................................................................................................5
(1) Number of units started during May..................................................................................................5
(2) Number of equivalents.......................................................................................................................6
(3) Conversion cost per equivalent..........................................................................................................6
(4) Work in progress inventory................................................................................................................6
(5) Fedora’s completed production..........................................................................................................6
WEEK 5......................................................................................................................................................6
Calculation..............................................................................................................................................6

WEEK 1
Total Period cost
A period expense would be any cost not able to capitalize through deferred, stock, or
capital equipment. A duration expense coincides quite strongly with both the passing of time
than from a relational case. Instances of the cost of the time frame are: Selling expenses and
administrative expenses.
To calculate the period cost
Period cost = Administrative expenses + Selling expenses
= 10000 + 5000
= 15000
WEEK 2
Yang’s total cost
Assessment of cost behavior represents an attempt by planning to comprehend how
operating expenses start changing with respect to variations in the position of exercise of an
organisation. These expenses could include direct materials, direct labor and overhead costs
caused as a result of the product design. The variance in cost is separated by the variance in
operation to calculate the contribution margin for each added unit produced ($1,530/510
thousand gallons = $3 / mil). The fixed value can be reduced by deducting contribution margin
(differential unit cost increased by amount of intensity) from the total cost.
There are analyzing the cost behavior in both months and analysis the behavior on basis
of variable and fixed cost units that mentioned in the question such as:
5000 units per 17
7500 units per 13
Thus, answer is 60000 + 5x
WEEK 3
Cost of goods sold accounts
Cost of Goods Sold (COGS) is the price to a supplier, fabricator or seller of a product.
Profits from sales less the cost of products sold are the gross profit of a company. The cost of the

sold goods is regarded a financial expenditure and can be reported on a tax publication titled an
entity's financial. The COGS can be measured in the widest position possible in 3 components
that ultimately result in a single formula. Or, to put it another way, the formula for measuring
COGS is: starting stock + buying-ending stock = selling products cost.
All the information given information for the account
Actual direct labor direct cost = 80000
Actual direct labor rate per hour = 8
Factory overhead rate = 12
Factor overhead incurred = 160000
There are preparing cost of goods sold accounts:
Actual direct labor = 80000 / 8 = 10000
Factory overhead = 160000 / 12 = 13333
So cost of goods sold = Actual direct labor + Factory overhead
= 10000 + 13333
= 23333
WEEK 4
(1) Number of units started during May
The number of units at the starting in 1 May such as:
Units completed = 100000
Work in progress = 70000
Total = 170000
Less – Material (40000)
Conversion (90000)
Total = 40000
(2) Number of equivalents
The number of equivalents such as:

40000 + 90000 = 130000
(3) Conversion cost per equivalent
There are number of conversion is = 710000 – 90000
= 620000
(4) Work in progress inventory
70000 units at the end of the 31 May that included in the work in progress inventory.
(5) Fedora’s completed production
The complete production of the Feroda ids 100,000
WEEK 5
Calculation
Overhead rate per machine = The overhead absorption frequency for units produced is computed
by subtracting the approximate ongoing cost maximum of the industrial production by the
approximate variety of manufacturing minutes. This calculation applies to the overhead
estimated since the overhead sum is based on assumptions rather than real costs.
= 480000 / 35000
= 13.71
Practical capacity = Practical capacity is the largest average of accurate outcome a
manufacturing plant can sustain over the lengthy period. It is the theoretical maximum outcome,
sans the leisure time required for continuing inspection and maintenance, production cycle
moment, planned time off after employees, and so forth.
= 432000 / 175000
= 2.46
Normal capacity = As per the normal condition, normal capacity is the production achieved or
achievable on normal over and certain period of time, taking into consideration the capacity loss
outputs from prepared maintenance. Normal capacity is practical capacity except for the loss in
value from outside factors. Standard capacity is the sum of the volume of output that can
normally be assumed over the lengthy period. When preparing the budget for the scale of output
that can be achieved, normal ability is used instead of the conceptual maximum capacity, as the
likelihood of maximum capacity being achieved is quite high.

Budgeted capacity = Budgeted capacity is the highest guess of the expected amount of output for
a future date. This number can be measured in cumulative periods of usable manufacturing
capacity, or only the scheduled times which will be accessible at the breakdown. The term
"budget capacity" means the ability of a corporation to use cash and labour when generating
product or providing a service. The word capacity does not mean that the company must spend
each accessible single cent, but makes reference to the quantity of goods or services generated
with both the allocated project which meets the performance standards and procedures of the
government.