HI5017 Managerial Accounting Assignment: Case Study and Critique

This report presents a comprehensive analysis of managerial accounting principles through a case study and a journal article critique. Part A of the report delves into a case study, exploring various cost concepts such as sunk, fixed, variable, and incremental costs, with practical examples. It identifies relevant and irrelevant information for decision-making, calculates costs for different scenarios, and determines the optimal number of employees for a daycare center. Part B critiques a journal article, examining the components of a management accounting system in two companies and their impact on efficient decision-making. It also highlights the role of management accounting in the innovation process, providing examples from the companies, and identifies key outcomes from the research. The report aims to demonstrate an understanding of cost concepts and their application in real-world business scenarios, as well as the practical use of accounting information in decision-making and achieving business goals.

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

1MANAGERIAL ACCOUNTING
Table of Contents
Part A: Case Study Analysis..............................................................................................2
1. Considering different types of cost disused in the unit, while listing any three types
of cost, while providing relevant examples:...................................................................2
2. Identifying the information that is relevant to the decision of purchasing the
appliances, while indicating what information is irrelevant............................................2
3. Indicating the cost of couple of launder clothes:........................................................3
4. Depicting relevant calculation regarding the day care scenario:...............................4
5. Providing relevant calculations regarding how many employees are needed in the
centre:............................................................................................................................5
Part B: Journal Article Critique..........................................................................................7
1. Recognizing the components of the management accounting system in each of the
two companies and discussing the relevance in enabling decisions to be made
efficiently:...........................................................................................................................7
2. Amplification on how management accounting contributes to the innovation
process, while including two specific examples from each of the two companies in the
journal article:.................................................................................................................7
3. Indicating about the four specific outcomes or lessons learned from the article
research, while justifying the answer:............................................................................8
References and Bibliographies:.......................................................................................10

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Part A: Case Study Analysis
1. Considering different types of cost disused in the unit, while listing any three
types of cost, while providing relevant examples:
The case study directly indicates about the relevant examples regarding the
different types of cost was included in the unit such as sunk cost, fixed cost, variable
cost, an incremental cost. Moreover adequate analysis regarding the fixed cost has
been conducted which is relatively fixed and does not increase or decrease in regards
with the alterations in products. Further analysis directly indicates about the sun cost
which is not considered at the time of making relevant decisions, as it is an investment
that is conducted by the organization to detect the feasibility of the project. In the similar
instance, Variable cost increases and decreases with the alterations in volume of the
production which is relatively depicted in the case. Thus, adequate alterations in the
production requirements good directly change the level of variable cost involved in the
total production (Alsharari, Dixon and Youssef 2015). Lastly, adequate information
about the incremental cost is also provided in the case where planning analysis has
been conducted for obtaining additional cost affecting the organization. The adequate
examples for all the relevant cost structure discussed in the above segment is directly
depicted in as follows.
 Incremental cost example is directly related to the relevant cost of utilities, which are
at the levels of $50. The relevant changes in the cost of utilities need to be
conducted over the period of time, where every month it could increase and number
of children does not have any relevant factor. Therefore, the cost of utilities, which
will be increasing for the day care, is considered to be an incremental cost, which
needs to be borne over the period of time.
 Fixed cost example is relevantly at the overall license fee that needs to be paid by
the day care irrespective of any activities. The overall license fees that is relevantly
accounted for is at the levels of $225, which needs to be paid by the organization.
 The relevant evaluation has been detected, where adequate variable cost of $800
needs to be paid for each child, which is directly related to the child care cost.
Hence, from the relevant evaluation, it can be detected that variable cost is subject
to the enrolments that is being conducted by the students (Messner 2016).
2. Identifying the information that is relevant to the decision of purchasing the
appliances, while indicating what information is irrelevant
From the relevant evaluation of the case study it could be identified that there are
different types of cost which can be segregated between irrelevant and relevant
expenses. The major issue that is identified in the case is the inherited which directly
related to the cost incurred following the decision, while detecting the relevant
differentiation in cost that might be conducted due to the set of criteria’s. From the
element evaluation it can be detected that relevant appliances needs to be bought by
Frank for effectively improving the productivity of the daycare. The relevant cost related
to the appliances is depicted as new appliance cost. Delivery cost related to new
appliance, additional utility cost, and installation cost related to new appliance.

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Further evaluation of the case study has directly highlighted that there are
different levels of alternative cost that is available to detect the relevant Differences in
cost among the alternative. From the relevant evaluation, it could be identified that there
are different level of expenses such as delivery cost and pickup cost of laundry services
and self-service laundry expense like laundering detergent and mileage which leads to
be taken into consideration for determining the level of expenses that will be incurred in
the operation.
Moreover, the understanding of relevant cost incurred for different alternatives
directly help in detecting the future decisions of the certain project. However, there are
different levels of irrelevant cost which is mentioned in the case study that does not
need to be considered while making relevant decisions. The case study directly
emphasis on the decision of purchasing plans for effectively supporting the production
needs of the day care. The irrelevant cost related to the Decision Process are old
appliance cost, and detergent cost, which is not relevant if available option do not take
into the account of delivery and pick up services. Hence, from the valuation it could be
identified that there are different level of relevant and irrelevant cost that needs to be
considered before making the decision of purchasing the appliance effectively improving
the productivity of the day care (Juras 2014).
3. Indicating the cost of couple of launder clothes:
The analysis of the case study has directly highlighted the relevant cost that is to be
used for ascertaining the most feasible alternative for the day care unit. However, the
analysis directly indicated three different possible alternatives that can be used by the
way for effective improving the cost related to laundry clothes. The three significant
options provided to the day care is rental service from red oak laundry and dry cleaning,
laundromat service, and purchase of new dryer and washers. Moreover, all the three
alternatives have been evaluated to identify the best possible option that can be used
for effectively improving their services and reduce the cost incurred in laundry clothes
(Bromwich and Scapens 2016).
The analysis of all the three options directly indicated that the first and second
option has no initial investment requirement as the service will be transferred to another
organization for which relevant cost is incurred by the day care. Nevertheless, the third
option requires adequate investment capital, as relevant expenses needs to be
conducted inform of delivery charges, dryers, installations, and washers. The overall
cost that would be incurred under the three possible alternatives is depicted as follows.

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The calculations depicted in the above table directly indicate about the different
level of cost that will be incurred by the day care for the laundry cost. From the
valuation, it could be identified that option one is the most suitable investment option as
a relatively has the lowest cash outflow and annual expense that needs to be conducted
by the day care. However, other options are relatively increase the cash outflow which
is not beneficial for the center as it will hamper its overall operational capability and
reduce the cash availability conditions. Though, purchasing the appliances would be the
most cost effective measure as the total monthly operating expenses is relatively low,
whereas the excessive initial cost and investment that is required for option 3 would
directly nullify the benefits that would be generated by the option. Hence, selection of
option one is the best possible alternative for the Day Care Centre as it will minimize the
level of cash outflows (Kaplan and Atkinson 2015).
4. Depicting relevant calculation regarding the day care scenario:
From the relevant analysis, it could be identified that adequate calculations are
conducted for determining the overall additional number of Employees that can be
acquired by the day care. Analysis of the calculation has directly indicated that
incremental cost of undertaking changes relatively increases the level of staff for
feeding additional children. The number of additions in the children that is supported by
the data centers for directly increases the level of revenues that would be generated in
the process. Moreover, the calculations that would support the additional number of
employees are depicted as follows.

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The above calculations directly indicate about the relevant increment and profit
per month after adding new employees to the daycare center. From the element
evaluation it can be detected that additional revenue of 2400 would be generated per
addition in number of children's with the increment in employees. Therefore, the overall
expenses in employees would be at the levels of 1559, while the additional pay for the
food for children is at 208. This relatively helps in detecting that the overall profit that
would be made by the Day Care Centre after adding one more employee is at the levels
of 633. Hence, the addition in the employees would be much beneficial for the daycare
center if more and more children’s are supported and cared for (Maas, Schaltegger and
Crutzen 2016).
5. Providing relevant calculations regarding how many employees are needed in
the centre:
Adequate analysis of the case study has directly helped in detecting the insight
on the facilities locations and enrollment decisions that needs to be conducted by the
management needs to be conducted by understanding the strategic goals. From the
analysis, it could be understood Decrement enrollment decision for the number of staff
needs to be conducted for additional food expense if different alternators are selected
as the facilities location. The calculation directly reveals the number of children’s that a
facility can hold and irrelevant expenses that will be incurred for providing the overall
services (De, Cooper and Manochin 2015). The calculations are depicted as follows
which complies for both the current location and larger facilities.

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The calculations conducted in the above tables directly indicate about the two
different levels of income that will be generated from recent location and larger facility
location. Moreover, the calculation as indicated above the level of income and the
number of children that could be accommodated in the facility. From the analysis, it
could be identified that with the increment in number of children overall income from the
facility directly increases. There are significant changes in the values of net income
when the number of children that is taken care of changes. from the element evaluation
it is detected that using the current location with 9 children in total would eventually help
the Day Care Centre to generate adequate revenues, as moving to the larger facility
would incur new expenses. The change in facility of the day care center will result in
high expenses, which will affect the overall revenue generation capability of the day
care center (Quattrone 2016). However, it is seen that when the number of children
increases to 14 then overall revenues of the center directly decreases. Thus, it
advisable for Frank to remain in the current location and increase the number of

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children's to improve the level of revenues that could be generated from the day care
center.
Part B: Journal Article Critique
1. Recognizing the components of the management accounting system in each of
the two companies and discussing the relevance in enabling decisions to be
made efficiently:
The analysis of the journal directly helps in identifying the application of
Management Accounting system that is conducted by organizations to support its
operations. the journals directory indicate about different level of components such as
planning controlling strategy and decision making, which is used, as the major
component of Management Accounting by the organizations. The analysis of the journal
has also highlighted two different companies such as Canon Inc. and Apple computer
Inc. for identifying the level of information’s that can be effectively utilized by companies
to enhance the growth and innovative competitiveness. the journal directly highlights the
relevant significance of innovative expansion and futuristic product development that
has been conducted by both Canon Inc. and Apple computer Inc. during their
operations. The success of both the companies is relatively dependent on the
technological competitiveness as described to make a relevant mark in the market to
effectively increase their sales and revenue. Further analysis of the journal has directly
highlighted that both the organization maintains an adequate information system and
sharing process, which eventually allows the employees of the organizations to
effectively device new and futuristic products that could help develop and increase
innovative perspective of the organization.
The analysis of the journal also highlighted me to Innovative process that was
used by Canon Ink for effectively relying on the feasibility study which helps in
developing new product. From the analysis, it could also be identified that Apple Inc.
has adequately improve its innovation which has relatively helped the organization to
effectively improve its current product line. the company has adequately utilize
Management Accounting Tools and techniques for effectively managing and sharing
this system information throughout the organization. This has helped appealing to
effectively create new and innovative products combining the information from all
departments. Thus, the journal directly highlights on the significance of Management
Accounting that allows organization to enable relevant operations and increased their
creative edge (Nonaka and Kenney 1991).
2. Amplification on how management accounting contributes to the innovation
process, while including two specific examples from each of the two companies
in the journal article:
The analysis of the journalist directly helps in detecting the contributions that
were made by the management accounting in the innovative process of organizations.
From the relevant analysis, it could be identified that Management Accounting has
allowed the organization to effectively improve with innovative drive which in turn
supports the innovative product manufacturing process. The journal has directly
indicated about Apple Inc. and Canon Inc., where the management of both the

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organization has adequately adapted to the management accounting process for
effectively improving its operations and increasing firm management. This improvement
as a relatively help in upholding the information system which has relatively created an
adequate management process where information about being transferred from one
individual to another for effectively making relevant provisions regarding the innovative
products. Thus, the journal directly indicates that by the creation and sharing of useful
information management is able to improve their innovative product line and expand the
futuristic products (Nonaka and Kenney 1991).
From the analysis of the journal, it has directly indicated that management
executives are able to analyses both financial and nonfinancial information for improving
the level of business decision making process. Moreover, the journal also indicates
about the significance of business information system that allows the management to
improve the efficiency and innovation and their product. The major contributors to the
innovation are relatively at Job levels equivalent to executive, management, employees,
and engineers. Furthermore, the analysis of the case study as indicated that Apple Inc.
has efficiently utilized its Information sharing system to improve its innovative product
line and reduce the managerial problems affecting its production and productivity.
Moreover, Canon Ink with the help of innovative Information sharing system is able to
increase their current technological advancements effectively develop new product
range. Hence, it could be understood that with the help of adequate innovative
Information sharing process the organizations are able to improve its efficiency, which in
turn boosts the managerial decision making process.
3. Indicating about the four specific outcomes or lessons learned from the article
research, while justifying the answer:
The analysis of the article research has directly help in identifying for different
specific lessons of outcomes which can allow the organization to improve their current
operational capability. From the analysis of the journal, it could be identified that
management is able to effectively improve the decision making process by adequately
increasing the efficiency of the resource management. Moreover, this improvement in
the resource management condition directly helps the management to adequately
improve growth and increase financial stability of the company. Further analysis directly
indicated that decision making process of the management is relatively considered a
significant endeavor, which is directly related to the functionality and success of an
organization. Hence, with the help of adequate management system the organization is
able to increase the competitiveness and achieve the targeted goals.
The second major outcomes from the article were the significance of information
management and information system, which is an effective process that allows the
organization to make relevant decision regarding its progress. The journalist directly
highlighted about the success story of both Apple Inc. and Canon Inc., who has applied
adequate Management Accounting systems to improve their current information
technology conditions. the third major outcomes at was discussed from the article was
the increment in the competitive edge of companies that is conducted with the help of
management information and information system as it helps in enervating new products
and services for the organization (Nonaka and Kenney 1991).
Lastly, the fourth outcome that is analyzed from the journal is the managers
which utilize the information that is presented from the management information system.

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The managers need to be highly qualified and adequate for effectively analyzing the
information provided by the system, as it would eventually help in supporting the overall
business process. Therefore, with the help of adequate management information
system and executive, organizations are able to generate high level of income from their
operations, as more innovative product line can be established.

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References and Bibliographies:
Alsharari, N.M., Dixon, R. and Youssef, M.A.E.A., 2015. Management accounting
change: critical review and a new contextual framework. Journal of Accounting &
Organizational Change, 11(4), pp.476-502.
Bromwich, M. and Scapens, R.W., 2016. Management accounting research: 25 years
on. Management Accounting Research, 31, pp.1-9.
De Loo, I., Cooper, S. and Manochin, M., 2015. Enhancing the transparency of
accounting research: the case of narrative analysis. Qualitative Research in Accounting
& Management, 12(1), pp.34-54.
Juras, A., 2014. Strategic Management Accounting-What Is the Current State of the
Concept?. Economy Transdisciplinarity Cognition, 17(2), p.76.
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI
Learning.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability
assessment, management accounting, control, and reporting. Journal of Cleaner
Production, 136, pp.237-248.
Messner, M., 2016. Does industry matter? How industry context shapes management
accounting practice. Management Accounting Research, 31, pp.103-111.
Nonaka, I. and Kenney. M., 1991. Towards a new theory of innovation management: A
case study comparing Canon, Inc. and Apple Computer, Inc. Journal of Engineering and
Technology Management, 8, p. 67-83.
Quattrone, P., 2016. Management accounting goes digital: Will the move make it
wiser?. Management Accounting Research, 31, pp.118-122.