Project Report: Financial Analysis of Cost and Control Strategies

This project report offers a comprehensive analysis of cost and control methods, including job costing, process costing, and variance analysis. The report begins with a job costing problem, presenting normal and formula views, as well as a manual solution. It then delves into management accounting, discussing the evolution of cost accounting and its modern applications, including a historical perspective referencing the Great Pyramid of Giza. The report further examines process costing, providing production reports and calculations for different processes. Finally, it explores joint costing for decision-making and variance analysis, calculating material and labor variances and providing journal entries. The project aims to provide a practical understanding of cost accounting principles and their application in financial analysis and cost management.

RUNNING HEAD: COST AND CONTROL
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Project Report: Cost and control

COST AND CONTROL
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Job costing:
a. Solution:
Normal View:
Direct material control
Debit credit
Particulars amount Particulars amount
balance b/d 23655 WIP 4810
Purchase 6155 balance c/d 25000
29810 29810
Work in process
Debit credit
Particulars amount Particulars amount
Balance b/d 6700
Direct Material 4810 Finished goods 30110
Labour 14800 balance c/d 8200
Factory overhead 12000
38310 38310
Finished Goods
Debit credit
Particulars amount Particulars amount
Balance b/d 8790 Sales 48000
WIP 30110 balance c/d 8900
gross profit 18000
56900 56900
Accounts Payable
Debit credit
Particulars amount Particulars amount
Balance b/d 2345
Cash 6700
Direct material
(purchase) 6155
balance
c/d 1800
8500 8500
Cost of goods sold

COST AND CONTROL
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Debit credit
Particulars amount Particulars amount
sales 48000 Gross profit 18000
Balance c/d 30000
48000 48000
Formula View:
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B C D E
Debit credit
Particluars amount Particluars amount
balance b/d =C9-C7 WIP 4810
Purchase =J7 balance c/d 25000
=E9 =SUM(E6:E7)
Debit credit
Particluars amount Particluars amount
Balance b/d 6700
Direct Material =C18-(C16+C17+C14) Finished goods =C24
Labor =3700*4 balance c/d =(1200+7000)
Factory overhead =12000
=E18 =SUM(E15:E16)
Debit credit
Particluars amount Particluars amount
Balance b/d 8790 Sales 48000
WIP =C26-(C23+C25) balance c/d 8900
gross profit =48000*(60/160)
=E26 =SUM(E23:E24)
Direct material control
Work in process
Finished Goods
Manual solution:

COST AND CONTROL
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COST AND CONTROL
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b. Management accounting and history:

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Cost management accounting has been changed with a great level from earlier
concepts. Currently, the concept of cost accounting depict that the cost accounting is an
essential part of accounting of manufacturing companies and thus all related aspect must be
taken into consideration for the betterment of the results. Modern cost accounting concept
depict that the company must look over the budgeting report, various internal and external
aspects, variances etc which could help the company to manage and maintain the extra cost of
the company.
Further, study has been conducted over the great pyramid of Giza to analyze the
concept of modern cost accounting in a great manner (Garrison et al, 2010). Through this
study, it has been found that the great pyramid of Giza had once felled into the category of 7
wonders of the world. This structure has been made by human hands and it is the biggest
structure of this type. Currently a study has been conducted over great pyramid of Giza to
analyze the modern costing concept and it has been analyzed that various aspects and related
factors have been discussed while making this great pyramid of Giza and thus in the modern
cost accounting, if the accountant would look over entire related aspect than it would be easy
for the company to reduce the level of expenses.
Process Costing:
Normal View:
Company Name
Production Report
Process 1 Physical Equivalent Units Total
Flows Material Conversion
Units to account for:
From beginning WIP 2000 600 600
Units started during the year 6000 6000 6000
Total units to account for 8000
Units accounted for:
Completed and transferred
out 7000 7000 7000
Ending WIP 1000 1000 500
Total units accounted for 8000
Total equivalent Units 8000 7500

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Cost to accounts for:
Beginning WIP 3000 2000
Costs incurred during year 30000 60000
Total cost to account for 33000 62000
Cost per equivalent year 4.125 8.2666667 12.3917
Cost of units completed and transferred out 86741.66667
Ending WIP 8258.333333
Company Name
Production Report
Process 1 Physical Equivalent Units Total
Flows Material Conversion
Units to account for:
From beginning WIP 1000 300 300
Units started during the year 7000 6000 6000
Total units to account for 8000
Units accounted for:
Completed 7250 7250 7250
Ending WIP 750 750 225
Total units accounted for 8000
Total equivalent Units 8000 7475
Cost to accounts for:
Tx-in $ 8,000
Beginning WIP $ 3,000 $ 4,000
Costs incurred during year $ 35,000 $ 45,000
Total cost to account for $ 46,000 49000
Cost per equivalent year 5.75 6.5551839 12.3051839
Cost of units completed and transferred out 89212.5836
Ending WIP 5787.41639

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Company Name
Production Report
Process 2 Physical Equivalent Units Total
Flows Material Conversion
Units to account for:
From beginning WIP 1000 300 300
Units started during the year 7000 6000 6000
Total units to account for 8000
Units accounted for:
Completed 7250 7250 7250
Ending WIP 750 750 225
Total units accounted for 8000
Total equivalent Units 8000 7475
Cost to accounts for:
Tx-in $ 8,000
Beginning WIP $ 3,000 $ 4,000
Costs incurred during year $ 35,000 $ 45,000
Total cost to account for $ 46,000 49000
Cost per equivalent year 5.75 6.5551839 12.3051839
Cost of units completed and transferred out 89212.5836
Ending WIP 5787.41639
Formula View:

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B C D E F G
Process 1 Physical Total
Flows Material Conversion
Units to account for:
From begining WIP =D13 =D36*30% =D36*30%
Units started during the year =D14 6000 6000
Total units to account for =D36+D37
Units accounted for:
Completed and transferred out =D15 7000 7000
Ending WIP 1000 1000 =D42*50%
Total units accounted for =D38
Total equivalent Units =E41+E42 =F41+F42
Cost to accounts for:
Begining WIP 3000 2000
Costs incurred during year 30000 60000
Total cost to account for =E48+E49 =F48+F49
Cost per equivalent year =E50/E44 =F50/F44 =E51+F51
Cost of units completed and transferred out =D41*G51
Ending WIP =E42*E51+F42*F51
Equivalent Units
Company Name
Production Report
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J K L M N O
Process 2 Physical Total
Flows Material Conversion
Units to account for:
From begining WIP =F13 =L36*30% =L36*30%
Units started during the year =D41 6000 6000
Total units to account for =L36+L37
Units accounted for:
Completed =L43-L42 =L41 =M41
Ending WIP 750 =L42 =L42*30%
Total units accounted for =L38
Total equivalent Units =M41+M42 =N41+N42
Cost to accounts for:
Tx-in 8000
Begining WIP =F20 =F21
Costs incurred during year =F23 =F24
Total cost to account for =M48+M49+M47 =N48+N49
Cost per equivalent year =M50/M44 =N50/N44 =M51+N51
Cost of units completed and transferred out =L41*O51
Ending WIP =M42*M51+N42*N51
Company Name
Production Report
Equivalent Units
Manual solution:

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Joint costing- decision making:

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a) Normal View:
Product A Product B
Material 60000 40000
Cost
$
1,87,500
$
62,500
Further
Processing
$
45,000
$
25,000
Total cost
$
2,32,500
$
87,500
Total units 60000 40000
Cost per unit
$
3.88
$
2.19
Selling price per
unit
$
4.50
$
2.54
Gross margin rate 16.13% 16.13%
Formula View:
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B C D
Product A Product B
Material 60000 40000
Cost =187500 =250000-C5
Further Processing 45000 25000
Total cost =C5+C6 =D5+D6
Total units =C4 =D4
Cost per unit =C7/C8 =D7/D8
Sellinf price per unit 4.5 =D9*116.13%
Gross margin rate =(C10-C9)/C9 0.1613
Manual solution:

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b) Report: