Management Accounting: Costing, Control, and Financial Reporting

This management accounting assignment solution provides detailed answers and explanations for a range of questions. It covers topics such as panopticism's relevance to management accounting, the functions of management accounting including compliance, control and competitive support, and the use of checklists as control devices, illustrated by the Van Halen rock band example. The solution includes the preparation of a manufacturing statement and income statement, analysis of perpetual inventory systems, and the treatment of overtime payments. Furthermore, it delves into material control accounts, journal entries, accrued payroll calculations, and a comparative analysis of traditional costing and activity-based costing (ABC) systems. The assignment concludes with a detailed explanation of direct, step, and reciprocal services methods for cost allocation, including matrix algebra and algebraic approaches. Desklib offers a wealth of similar solved assignments and study resources to aid students in their academic pursuits.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Table of Contents
Answer to Question 1:.....................................................................................................................2
Answer to Question 2:.....................................................................................................................3
Answer to Question 3:.....................................................................................................................4
Answer to Question 4:.....................................................................................................................4
Answer to Question 5:.....................................................................................................................8
Part a:...........................................................................................................................................8
Part b:...........................................................................................................................................8
Answer to Question 6:.....................................................................................................................8
Answer to Question 7:.....................................................................................................................9
Answer to Question 8:...................................................................................................................10
Answer to Question 9:...................................................................................................................15
Answer to Question 10:.................................................................................................................16
References:....................................................................................................................................21

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Answer to Question 1:
The art of observation and inserting the observation fear into the observed individuals
could be termed as panopticism. Jeremy Bentham has established this theory and the following
diagram would help in explaining the concept:
As per the above diagram, the construction of the above place is simple because an
observation tower is present in the centre and the cells are used for lodging the prisoners. This
has helped the in-charge of the prison to maintain a thorough observation on the prisoners. In
addition, the prisoners are observed to suffer from fear due to such location. This is because they
are kept under strict vigilance from the tower leading to behavioural effects on them.

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Since fund management is crucial in all firms, the importance of management accounting
has grown rapidly. Due to this, panopticism has made its way, since an illusion is created often
that all things are kept under vigilance and they are transferred via workflow (Adler, 2018). The
perception is that some unknown individuals investigate the financial transactions passed in the
departments. Due to this, the strict department of a firm is the accounting department. Thus,
panopticism is highly valuable in those organisations, especially in departments concerning
business funds.
Answer to Question 2:
With the help of management accounting, the management of an organisation could
undertake significant decisions for maintaining appropriate control of the business operations.
The three major functions of management accounting are enumerated briefly as follows:
Compliance:
With the help of compliance, the reporting needs could be met along with the external
regulations. Hence, it is necessary for the accountants to realise expenses and revenues
appropriately, while the assets and liabilities are to be valued in accordance as well. The
management accountants develop operating systems associated with cost accounting, in which
the inventories are valued by distributing costs to products (Eldenburg, Krishnan & Krishnan,
2017).
Control:

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Control helps in signifying the entire process of planning and control. Planning could be
carried out appropriately with the help of management accountants by developing budgets for
summarising the operational plans. In addition, they review the design and operation of systems.
Competitive support:
It implies the provision of financial services to the management in order to enhance the
overall business competitiveness. With the help of financial services, there is increase in value of
the firm by aiding line and process managers in undertaking decisions for engaging the
management accountants directly in the process of decision-making.
Answer to Question 3:
Van Helen is a rock band in US and there are four members in the band. There is a
contract of Van Helen with the concert promoters that the bowl of M&M is to be provided
backstage; however, the brown candy would be removed upon the show forfeiture within the
entire band compensation (Henri, Boiral & Roy, 2016). This is the sole band to undertake
adequate production into tertiary and third-level markets. They had managed to pull up with nine
trucks having gears and the standard was a maximum of three trucks. In addition, technical errors
could be observed as well.
The contrast riser read like a version related to the Chinese Yellow Pages because of the
presence of equipment and individuals needed to maintain the overall functions. Thus, the
overall production level could be checked in line and there is not presence of any profession
where the checklists would be highly advantageous.

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Answer to Question 4:
Manufacturing statement (Normal view):
Manufacturing statement (Formula view):

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Income statement (Normal view):

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Income statement (Formula view):

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Answer to Question 5:
Part a:
Under the perpetual inventory system, the organisations are required to count items
periodically in inventory and valuation is made to maintain record of the cost of goods sold. The
managers would be highly benefitted, since the levels of inventory could be kept under strict
vigilance for preparing the interim financial statements (Klychova, Faskhutdinova & Sadrieva,
2014).
Part b:
Since there is no association between production purpose and overtime payment, it needs
to be treated as overhead expense rather than direct labour.
Answer to Question 6:
Material control account and journal entry (Normal view):

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Material control account and journal entry (Formula view):
Answer to Question 7:
T-account for accrued payroll and journal entries (Normal view):

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T-account for accrued payroll and journal entries (Formula view):
Answer to Question 8:
Amount of accrued payroll in respect of September earnings (Normal view):
Amount of accrued payroll in respect of September earnings (Formula view):
Balance in accrued payroll account at the end of September (Normal view):

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Balance in accrued payroll account at the end of September (Formula view):
Weekly journal entries (Normal view):