MANAGEMENT ACCOUNTING

Management Accounting: Costing and Budgeting

TABLE OF CONTENT

INTRODUCTION1

DISCUSSION1

Task 11

1.1 Different types of costs1

1.2 Different Costing Methods2

1.3 Analysis of Product - Alice bakery3

Task 2 - Propose methods to reduce costs and enhance value within a business5

2.1 Productivity, Efficiency and Effectiveness5

2.2 Principles of Quality & Value6

2.3 Potential improvement tools and techniques7

Task 3- Scenario8

3.1 The purpose and nature of budgeting Process8

3.2 Different Budgeting Method8

3.3 Relevant budgets - Mater Budget Shovel Company10

Task 4- Prepare forecasts and budgets for School soccer team22

4.1 - Variances22

4.2 - Comments on Variances25

CONCLUSION25

REFERENCES26

Management Accounting: Costing and Budgeting

Introduction

The modern market system significantly alters the fundamental principles of the formation of information on the cost of services and requires the development of new approaches to the construction of management accounting in enterprises service. There is the need to integrate different methods capturing information about the costs and performance of the business entities of services to address the operational and medium-term objectives. This has become an evident need for improved methods of management accounting cost, the development of new criteria for the composition and classification of costs that meet the requirements of different users which is in the modification of the content of the entire system flow accounting information for budgeting system in the enterprise.

Discussion

Task 1

1.1 Different types of costs

There is a huge competition in the market and in order to understand this competition is through understand the cost and revenue curve. Business has ability to control cost of the product but not in the revenue due to the uncertain condition of the market. The maximum profit earn by the business depends on the two elements. These elements are fixed costs and revenue curve. Business seeks to keep the fix cost as low as they can and how much revenue is crossing the variable cost for high net profit.

There are different costs associated with the product and has huge impact on the profit. As these cost increases the profit of the company reduces. There are certain direct cost and indirect costs. In this part the most important cost will be discuss which has direct impact on the profit of the company.

Types of costs under control that is available on the occurrence of a cost:

Controllable costs: These types of costs are those on which a person, a certain level, has the authority to carry them out or not. For example, the salaries of sales managers in different regions are controllable by the general sales manager, the salary of the secretary, for his immediate boss, etc. It is important to note that, ultimately, all costs are controllable in either level of the organization is evident that as one moves to higher levels of the organization, costs are more controllable. That is, most of the costs are not controllable at lower levels. Controllable costs are not necessarily equal to the direct costs. For example, the production manager salary is direct about their area but not controllable. These costs are the basis for designing accounting for areas of responsibility or any administrative control (Warren ...