Reference no: EM132873567

Management Accounting

Management Accounting Principles

LO1 Demonstrate An Understanding Of Management Accounting Systems
LO2 Apply A Range Of Management Accounting Techniques
LO3 Explain The Use Of Planning Tools Used In Management Accounting
LO4 Compare Ways In Which Organisations Could Use Management Accounting

To Respond To Financial Problems

ASSIGNMENT SCENARIO

SCENARIO 1

You have been hired as a Management Accountant in a medium-sized organization.

SCENARIO 2

DELTA LTD, PRODUCES AND SELLS ONE PRODUCT ONLY. THE STANDARD COST AND PRICE FOR ONE UNIT BEING AS FOLLOWS

THE FIXED PRODUCTION OVERHEAD INCLUDED IN THE STANDARD COST IS BASED ON EXPECTED MONTHLY OUTPUT OF 600 UNITS. DELTA
LTD USES MARGINAL COSTING SYSTEM.
DURING APRIL THE ACTUAL RESULTS WERE AS FOLLOWS -

SCENARIO 3

A business had opening stock of 350 units valued at £7 per unit on 1st May. The following receipts and issues were recorded in May:

SCENARIO 4

MARGINAL AND ABSORPTION COSTING CONCEPT

Big Woof Co manufactures a single product, the Bark, details of which are as follows:

Annual fixed production overheads are budgeted to be £1.6 million and Big Woof expects to produce 1,280,000 units of the Bark each year. Overheads are absorbed on number of units. Actual overheads are £1.6 million for the year.
Budgeted fixed selling costs are £320,000 per quarter.

Actual sales and production units for the first quarter are given below : Sales - 240,000 units for quarter
Production - 280, 000 units quarter

There is no opening stock at the beginning of quarter.

SCENARIO 5

Hoopoe Ltd makes two products in one of its factories. The products comprise different mixes of two basic raw materials. One grade of direct labour is employed in the mixing process and another grade in final packaging. Standard (budgeted) direct material and direct labour costs for the two products per 100 units in the year ended 31 March 2012 were:

The direct material included in the budget is after taking into account a standard loss of material A in the process. The standard purchase prices of the raw materials and standard direct labour rates in the year ended 31 March 2012 were:
Raw material A £5.20 per kilo
Raw material B £1.80 per kilo Manufacturing labour £4.50 per hour Packaging labour £4.00 per hour

Management is preparing the budgets for the year ended 31 March 2013 and has decided to make the following changes to the 2012 figures:
• Standard material loss on raw material B of 10% of input, rather than the existing standard loss of 12%, is to be included.
• Increases in raw material purchase prices and labor rates, of 6% and 8% respectively, are to be incorporated in the new standards for the following period.
The budgeted sales for the year ended 31 March 2013 for Products Y and Z is as follows:
• Product Y 1,800,000 units
• Product Z 980,000 units
Stocks of raw materials and finished goods are budgeted as follows for the year ended 31 March 2013:

TASK 1
P1) Explain management accounting as distinct from financial accounting. Subsequently define a management accounting system.
a. Explain any three management accounting systems used by your department, specifying their requirements.

P2) Explain the importance of presenting financial information in a reliable, accurate, up-to-date and understandable format for the relevant users.
a. Explain the relevance of any three types of managerial accounting reports generated by your department for the organisation.

TASK 2 - SCENARIO
P3) Calculate costs using appropriate techniques of cost analysis to prepare an income statement using marginal and absorption costs for the quarter, using the information in scenario 4.

TASK 3
P4) Explain the advantages and disadvantages of different types of planning tools used for budgetary control.

TASK 4
P5) Compare how organisations are adapting management accounting systems to respond to financial problems

Attachment:- Management Accounting.rar