HI5017 Managerial Accounting Assignment: Case Study Evaluation

This assignment delves into the core concepts of managerial accounting, offering a comprehensive analysis of cost classifications, case studies, and the application of accounting principles in decision-making. The student explores fixed, variable, and marginal costs within a daycare center scenario, evaluating outsourcing, self-laundering, and appliance purchase options. Furthermore, the assignment examines the impact of hiring additional employees and potential expansion strategies. Part B extends the analysis to the broader context of management accounting, comparing the innovation strategies of Canon and Apple. It highlights how management accounting supports innovation and product development, emphasizing the importance of adapting to customer needs and achieving business objectives. The student leverages a provided case study and references to illustrate these concepts.

Running head: Managerial Accounting
Managerial Accounting
Name of the Student
Name of the University
Author Note

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Table of Contents
PART A.........................................................................................................................3
Question No 1...........................................................................................................3
Question No 2...........................................................................................................4
Question No 3...........................................................................................................5
Question No 4...........................................................................................................7
Question No 5...........................................................................................................8
PART B.........................................................................................................................9
Question No 1...........................................................................................................9
Question No 2.........................................................................................................10
Question No 3.........................................................................................................11
References and Bibliography.....................................................................................13

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PART A
Question No 1
Costing is the most important part for any organization as this help them to
know the cost of the product they use so this help them to estimate the purchasing
power of the company(Cooper 2017). As in the given case study there are many
types of cost have been discovered and the three types of the cost which are been
stated in the case study are listed below:
1. Fixed cost – The first cost which is been discussed among the case
study is the fixed cost. Fixed cost are the cost which are fixed
irrespective of the production and sale of the product. These cost
always remain fixed and the company have to pay it even when they
do not sale any product in the market(Dale and Plunkett 2017). These
cost remain same even when the activity level of the company
increase or decreases. Example related to these cost is the annual
fees of the licence and the insurance cost. As these cost will be remain
fixed even after there is a change in the total activity level of the
company.
2. Variable Cost – The second cost which is given in the case is the
variable cost. Variable cost are the cost which changes with the
change in the activity level as if the activity level increase or decrease
so it will also increase or decrease (Fullerton, Kennedy and Widener
2014). This are the sum of the marginal cost and it’s also consider a
part of total cost. The variable cost in the given case is the cost which
they charge per child as if its charge for per person so if the child
increase than the cost of the fee related to the child is also increased.

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3. Marginal Cost – The third cost is the marginal cost which is there in
the case studies. It is the increase in the total cost by an incremental
increase in the total cost, it can be classified as the additional cost
which the company have to pay in regards with the additional
production. In the given case as the company provides its services
from 8 am to 4 pm so of any one more than that than additional $15 is
charge for each additionally hour so this is been termed as marginal
cost as it is the additional hour so the additional pay can be termed as
marginal cost.
Question No 2
The information which is been provided in the case study which are relevant
in regards with the purchase of appliance is that the all the alternative which are
given are necessary in order to make the decision regarding the purchase of the
appliances as it gave all the three alternative to the company so that it can easily
know and make their decision regarding the product as first option give detail of
doing the outsourcing of the laundry services at a reasonable cost and giving all the
responsibility of the laundering to other. In the second option it give details about the
self-laundering service as in this the company have to travel and perform the service
and also it have to purchase additional products in order to complete the laundering
service. In the third alternative it had given the option that the company should invest
and purchased the appliances and can use as per their requirement this required a
huge amount of capital expenditure. So all these are the relevant information which
was given in the case study in regards with the appliance required by the company.
The information which are very irrelevant in regards with the purchase of
appliances is that the cost of the appliance which was given in the case studies as it

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is not relevant to the purchase as to purchase new appliance the old cost is not atall
relevant for the company.
Question No 3
There are three option which are given in the case studies and each option
have its own and strength and here it has been listed all the option and how it can
affect the company financial position.
Option 1
Under this option the company can do the laundering service from the
outsourcing process for the company which is nearby named as Red Oak Laundry
and Dry cleaning they even include the services like pick-up the stuff and also the
company will delivered the product so the company do not have to invest time in it.
The amount which is required by the company in regards with the same is shown
below as
Table No – 1
Source – Author
This option will cost the company $52 per month so if they select the option than
they have to pay this much amount every month.
Option 2
Under this option the company can do the laundering services themselves by
travelling three miles from the company and it will include some additional items
which are needed by the company in the process of laundering. This process require

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the company to invest its time as it have to travel for 6 miles for completing the
laundering services and get back to the company. The cost which is associate with
this option is been discussed below as
Table No - 2
Source – Author
So the company have to pay a total $49.67 in regards with the self-laundering
services so the company have to also think about this plan as it also needed human
power as the company individual have to travel 6 miles so that it can complete the
laundering process.
Option 3
The option 3 is that the company should purchase the appliance and should
invest in them and can put them in use as per their needs and preferences. The
calculation regarding the same is been provided below

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Table No – 3
Source - Author
This option show how much the company needed to in order to get both the washer
and dryers by the company. This also require capital expenditure and it help the
management to use the service as per their needs and as per their flexible timing.
Question No 4
As in the given case studies it is seen that there is much demand of the day
care centre and as a result the company can able to adopt one more employee in
the care centre and as a result of it, it can get more 3 children in the day care so the
option should has been analysed below as
Table No – 4
Source – Author
So it can be seen from the above that if the company appoint one employee it will
able to earn 841.2 more revenue so they should hire one more employee in business
as it is very profitable for the company.

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Question No 5
As in the given case studies it can be seen that the company want to expand
its business and to that they have check a rented place and what recommendation
regarding that so the calculation is shown below regarding the new project as
Table No – 5
Source – Author
So it can be seen that the company is earning good in the current situation as they
can take in to consideration 9 children in their current plan as the owner are two
people so in current they only need to employee one person so it also able them to
increase more amount of profit in compare to the new project as it can be seen that
the company is not able to earn more in regards of the new project so it should not
go for the expansion strategy. The company should only set their day care centre for
9 children and as there two individual as owners so they should have to employee 1
more person who can help them in keeping the care of the children and it will also
help them to earn more amount of profit from the business.

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PART B
Question No 1
Management accounting is very broader concept as include many concepts in
it. Management accounting incudes all the stages which are required by the
management in order to take decision regarding the business and how to manage
the business and achieve its business goals and objectives. It even include the
concepts of innovation and creation regarding the products and how it should
manage the product. As per the case study it can be seen that the both company
have management accounting process in the firm and also help them to make
decision in regards of the product.
As per the case study regards with the cannon it can be seen that the
company was not able to earn proper business income for the business. So the
company have change their planning process of the company in order to that they
have change their business plan process and introduced the camp session. Camp
session help them to innovate and create new ideas regards with the product
development so that it can help them to make their products more versatile and also
able to satisfy their customers need and preferences. This process help the
management to get more planned in order to the product this help them top get them
more decision in regards with product and help the company to manage the process
of the company.
As per the case study in regards with the Apple as apple also have
management accounting process in their company as they also have changed their
planning process in regard with the mac book as they were unable to get the amount
of the business which was required by the company so to get the required amount of
business it change its plan as a result it able to get the desired return from the

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company. This process help the company to make decision in regards with the
company product and help them to increase the efficiency and effectiveness of the
management process and help them to get more amount of profit to the company.
Question No 2
Innovation is the process from which the company do its product changes and
make their product as per the needs and requirement of the customers. This is done
by the both t the time of existing product and also the new product. As each products
require different amount of changes as per the customer needs. Management
accounting is the process which help the company to make the plan, process and
decision in regards with the product. Innovation help them to maintain the process
and help them to change and development of the product. Management accounting
help them innovation as it prepare the planning process in the business so this help
them to the company to put their innovation idea in the company planning and help
them to achieve the desired goals and objectives. It can be seen that the both the
company have used the innovation process very effectively. The example is that the
cannon company does not able to gain much amount of the business it innovated its
product beforehand so that it can do the requirement which are needed by the
management and also how the company will able to survive in the market. As per the
apple is concern it can be seen that the company did not changes its product
strategy but expand its business so that the can go for the personal computer
section. As personal computer was much in demand so the company changes its
mac book uses in related to the personal so that it can get more number of
customers who uses the mac book as per the personal computer so that it can
gather more amount of market in the current as well as future market.

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Question No 3
As per the case study there are many concepts which it able to learn from the
given case as management accounting help the company to manage their process
and also help them to overcome the business risk and able them to earn more
amount of profit. As management accounting is been concern it can be seen that it
help the company to plan, promote and help the management to make decision in
regards with the company product and also it able to get more amount of customers
and business from the market. From the given case study the outcomes which been
learn is been discussed below
In the case of the cannon it is seen that the company is was not able to get
the profit which is want to earn form the product so to overcome that it innovate the
product line and also change their product diversification. The two learning or
outcome which can be established is that the company should always innovate the
plan and process regarding the company product and also help them to make their
business run smoothly. The second learning is how the company should forecast
their product market and should react upon the forecasted amount and should also
changes their product process so that it can do as per the things which are required
by the management in order to achieve its desired goals.
In the case of the Apple it also seen that the want to change their product
market as it can be seen that the company want to go to the personal computer
section so this help them to go for the market and also help them to get more
amount of business. The learning which is been learn by the case is that
management accounting help the company to know more about the market and also
help them to know various factor in related the market so this help the company to
expand their business and to diversify their business process in regards with the

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company so that the company will able to get more amount of the business in the
market. The second outcomes is that management accounting help the company to
adopt the necessary changes in the process of the product and also help them to
overcome the business risk and help them to modify their business goals and
objective and also help them to know more about the customers and how the
company should able to satisfy the needs and taste of the customers.
So it can be concluded that the management accounting help the company in
many ways and with the help of them it able to satisfy the business goals.
Management accounting help the company to know the process of the product and
how it should develop its products as per the market. They help the management to
know more about the customers and also allow them to innovate the required
changes in the product so that it can able to satisfy the needs of the customers and
from which the company is able to earn more amount of profit. This process help
them the company to diversify and expand the business as it is seen that the
company cannon expand its product by doing some innovation it able to attract large
market and able to earn more amount of profit and whereas the apple diversify the
product to the personal computer market so that it can able to get the other
customers also in the market.