Comprehensive Managerial Accounting Report for Analysis

This managerial accounting report provides a comprehensive analysis of various key concepts. It begins with an overview of cost accounting, tracing its historical roots to the construction of the Great Pyramid of Giza and comparing traditional versus modern approaches. The report then delves into equivalent unit computations and cost per equivalent unit calculations. Furthermore, the report analyzes different scenarios related to product pricing and its impact on profitability. It also explores variance analysis, examining its purposes in budgetary control, materiality assessment, and forecasting. The report concludes with a discussion on the relationship between organizational budgeting and governmental policies, highlighting the influence of political factors. The report provides detailed answers to specific questions, including calculations and explanations, supported by relevant references.

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Answer to Question 1......................................................................................................................2
Requirement A.............................................................................................................................2
Requirement B.............................................................................................................................3
Answer to Question 2......................................................................................................................4
Answer to Question 3......................................................................................................................6
Requirement a..............................................................................................................................6
Requirement b..............................................................................................................................7
Answer to Question 4......................................................................................................................8
Requirement A.............................................................................................................................8
Requirement B...........................................................................................................................10
Answer to Question 5....................................................................................................................13
Requirement A...........................................................................................................................13
Requirement B...........................................................................................................................15
References......................................................................................................................................17

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Answer to Question 1
Requirement A

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Requirement B
4500 years ago, in the construction of the great pyramid of Giza, the cost accounting
format was used. Wide difference can be seen between the use of the great pyramid and its
current construction. At that time, pyramid was use with the application of traditional approach.
There were different stages in traditional approach like planning, initiating, executing, designing
and closing1. However, there were some major setbacks of that traditional cost accounting
method. In the modern cost management accounting, application of different techniques of
construction can be seen. It can be said that with the help of modern cost accounting process, the
construction of the great pyramid of Giza would be more appropriate. Segregation of cost is a
crucial way to manage the construction cost. It is assumed that cost of each unit of product is
same as the cost of other unit2. With the assistance of modern cost accounting techniques, actual
production cost can easily be assigned. Thus, from the above discussion, it can be understood
that the modern techniques for cost accounting is more appropriate than the traditional
techniques for cost accounting. In addition, it needs to be mentioned that the modern cost
accounting methods can be applied based on the nature and types of the companies.
1 DRURY, COLIN M. Management and cost accounting. Springer, 2013.
2 Vanderbeck, Edward J. Principles of cost accounting. Cengage Learning, 2012.

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Answer to Question 2
Equivalent Unit Computation

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Cost per Equivalent Units

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Cost of Finished Goods and Closing Stock
Answer to Question 3
Requirement a

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Requirement b
The calculation of net profit in general circumstances is shown below:
In case the organization sells Product A at a price of $2/kg at the split-off point, then the
outcome would be different and it is shown below:
From the above table, it can be seen that the company would face huge loss by changing
the product price. Thus, the company should process Product A further by not selling it outside.

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Answer to Question 4
Requirement A

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Requirement B
Introduction
Variance analysis is one of the major aspects for measuring the performance of the
business organizations. Variance analysis refers to the techniques or methods of qualitative

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investigation that help to determine the different between actual and planned performance of the
companies. The main objective of variance analysis is to maintain the internal control within the
business organizations. It needs to be mentioned that the tools of variance analysis can be used to
determine the performance gap of various sector of the companies like finance, costs and others.
The main aim of this business report is to analyze and evaluate the purposes of variance analysis
in different areas of the companies3.
Various Purposes of Variance Analysis
It can be seen that there are different kinds of purpose of variance analysis in the business
organizations and it can be applied in various sectors or sections of the companies. The major
purposes of variance analysis in the organizations are discussed below:
Budgeted v Actual Costs: The most important purpose of variance analysis is to help the
financial managers of the companies in managing the organizational budget. The organizational
managers use to do this by controlling the actual costs versus the budgeted costs. With the help
of variance analysis, the organizational managers can determine the performance gap of the
companies along with the reasons of those gaps. This process helps in the development of
effective business strategies4.
Materiality: Performance variance analysis helps in the identification of the relationship between
pairs of organizational variables. In this process, the importance of positive and negative
3 Bodie, Zvi. Investments. McGraw-Hill, 2013.
4 Gelman, Andrew, et al. Bayesian data analysis. Vol. 2. Boca Raton, FL: CRC press, 2014.