The process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions. Unlike financial accounting, which produces annual reports mainly for external stakeholders, management accounting generates monthly or weekly reports for an organization's internal audiences such as department managers and the chief executive officer. These reports typically show the amount of available cash, sales revenue generated, amount of orders in hand, state of accounts payable and accounts receivable, outstanding debts, raw material and inventory, and may also include trend charts, variance analysis, and other statistics. Also called managerial accounting.
Management accounting is a field distinct from public accounting is a critical profession that drives business performance. By definition, management accounting is a profession that involves partnering in management decision-making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy.
wira travels operates a small fleet of five (5) vehicles which provide transportation services to deliver goods for small manufacturing companies in Kulim, Kedah. Most of the time, all vehicles will be used simultaneously.
From the in formation given below for the year 2009, you are required to calculate:
The total cost
The average cost per tonne and per kilometre
Drivers wages RM 1,000 each per month
Depreciation of vehicles per annum RM 25,000
Petro expenses RM 37,750
Repairs and maintenance RM 21,250
Vehicle licenses RM 400 per vehicle
Insurance cost RM 1,600 per vehicle
Tyres cost RM 2,000 per vehicle
Miscellaneous costs RM 4,000
Total tonne carried 60 tonne
Total km travelled 7,000 km
ANSWER:
The total cost
Drivers wages RM 1,000 each per month
RM 1,000 x 5 x 12
RM 60,000
Depreciation of vehicles per annum RM 25,000
RM 25,000 x 5
RM 125,000
Petro expenses RM 37,750
RM 37,750
Repairs and maintenance RM 21,250
RM 21,250
Vehicle licenses RM 400 per vehicle
RM 400 x 5
RM 2,000
Insurance cost RM 1,600 per vehicle
RM1,600 x 5
RM 8,000
Tyres cost RM 2,000 per vehicle
RM 2,000 x 5
RM 10,000
Miscellaneous costs RM 4,000
RM 4,000
TOTAL COST
RM 268,000
The average cost per tonne and per kilometre
(a) Total tonne carried 60 tonne
Total cost
Total tonne
= RM 268,000
60 tonne
= 4,466.67 tonne
(b) Total km travelled 7,000 km
Total cost
Total km
= RM 268,000
7,000 km
= 38.29 km
a) Penang pizza sdn bhd is involved in selling cakes. You are required to classify the following costs according to their behaviour.
No.
Cost items
Fixed cost
Variable cost
Semi-variable cost
1.
Flour
2.
Electricity Expenses
3.
Sugar
4.
Salary of Baker
5.
Salary of Cashier
6.
Depreciation of machine
7.
Insurance
8.
Telephone Expenses
9.
Director's Salary
10.
Baking Powder
11.
Eggs
12.
Rental of shop
QUESTION 2
a)Define the following costs and draw three separate graphs to illustrate the cost behaviour pattern and give an example for each of the costs in relation to a printing shop.
Fixed cost
Variable cost
Semi-variable cost
b) identify the following items as controllable or non-controllable by the head of the production department:
Direct labour working hours
Insurance of machinery
Types of material used in production
Price of material paid to supplier
ANSWER:
(a)
Fixed cost are same (fixed) amount need to be paid by business regardless whether business doing good or not (high or low business activities). Example are management in salary, rental and insurance.
http://t1.gstatic.com/images?q=tbn:ANd9GcRFt45E4jGYCbnDLfjTiRlJGCF5pGIVzPWG6stIIkzi80iNyXBw_A
Variable cost are cost that totally related to production. The more production, the more variable cost will be incurred. Example are workers in operation line and raw material.
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Semi-variable cost are combination of fixed and variable cost. The fixed amount still have to paid plus variable cost that depend on production.
http://t0.gstatic.com/images?q=tbn:ANd9GcRNdGcKMY0-TYPV4CldQD4MuX5wZtPqVCFPXhsDiaJgn77RZIEw2Q
Answer:
(b)
Direct labour working hours
Non-controllable
Insurance of machinery
Non-controllable
Types of material used in production
controllable
Price of material paid to supplier
controllable
CONCLUSION
Financial accountants maintain a business' balances and accounts. They keep the business records legal and financially stable. Management accountants focus on forecasting. They have an exciting and forward-looking strategic role in many different types of organisations. They use various tools, such as ratio analysis and investment appraisal, to identify, measure and analyse the financial performance of a company. Many CIMA-trained management accountants are at the heart of top businesses in a wide variety of roles, including financial analyst or finance director. They contribute to decision-making across the organisation. The analysis they provide is vital in taking a business forward.
