Essays on Cost Accounting

Two distinct set of financial reports are used in managing a company, one made by Financial Accountants and the other by Managerial Accountants. These reports are aimed at the company’s external stakeholders such as investors and creditors and are prepared for each quarter and at the end of the financial year and. The format and content of these reports are laid down in laws such as the SOX (Sarbanes- Oxley) Act and in accounting regulations such as the GAAP (Generally Accepted Accounting Principles) and the IFRS (International Financial Reporting Standards). Financial reports become comparable across companies. Managerial accounting ...

Introduction

Sierra Ltd. is an automotive parts’ manufacturer situated in Eastbourne, England. The company manufacturers several distinct products and follows the traditional cost management system. It uses machine hours as the basis of allocation of overheads to its product costs. This report provides an assessment of Sierra’s finance director’s proposal to adopt the Activity Based Costing system for allocating overhead costs more appropriately and to increase sales margins. The most important issues faced by Sierra Ltd. are the declining revenue and profits since the last five years, low projected net profits for 2016 and high product costs. Sierra ...

Value Chain

The objective of analyzing Monster’s value chain is to make a product that will become popular to its customers, which includes not only the production segment but also marketing and distribution (Horngren and Data, 2015). This is because products will eventually need to be discontinued due to changing customer preferences and product innovation from competitors. This means that the company’s core operations and its products must continuously evolve and this could be done using the value chain analysis tool. For an energy drink company like Monster, one of its main goals is to continuously adapt to the ...

This paper is a review of the book titled, Finance for nonfinancial managers: 24 lessons for understanding and evaluating financial health, by Katherine Wagner. The book will help managers from non-financial background to understand the languages and techniques used in finance. It can enhance the participation of these managers in financial matters and decision making. Complex financial lessons are presented in a form that could be understood by people from non-financial backgrounds. (Wagner, 2005) The first chapter of the book reviews basic terms used in recording, classifying and summarizing financial transactions. Knowing these terms will help the manager to ...

MANAGEMENT ACCOUNTING

Standard Costs Used for Variance Analysis and Favourable/Unfavourable Terminologies with Suitable Examples 8

References 11

Management Accounting Differences between Management Accounting and Financial Accounting and the need for Investing in the latest Accounting Software Audience Served The basic difference between these two accounting fields is that the management accounting is concerned with providing information to internal stakeholders of an organisation such as the senior management, supervisors and employees. In contrast, financial accounting provides information about the financial health of the business to external stakeholders such as potential investors, shareholders (in case of a publicly traded company), tax authorities, lending institutions and ...

Issues of Implementing Fair Value Accounting in Emerging Economies

QUESTION 3

The fair value accounting has ensured accuracy in the operation of different organizations and business. The fair value valuation ensures that the organization practice a robust internal control process to make reasonable and consistent valuations an argument supported Bies’ (2012), Fair value accounting. These valuations should be subjected to independent review as required by the internal control process in order to ascertain that they reflect the underlying conditions of the market and they can’t be changed without having been approved as ascertained by He, Wong, and Young’s (2012), Challenges for Implementation of Fair Value Accounting ...

Question one

The benefit of the historical cost accounting is that the cost is known and can be easily checked in the invoice (Lal 696). In most cases the cost of the products is in the form of contracts transfer taxes, and payments. This perceived benefit relates to the hierarchy of the accounting qualities in that it is objective (Lal 696). This benefit ensures that the various reports of the financial position of an enterprise is accurate and can be verified easily by the lone documentary evidence. This historical cost accounting is related to the qualities that are mentioned in the ...

Ref: Sustainability Methods

Sustainability in an organization is the durability of policies, processes, methods and systems in the organization. The main objective of sustainability is sustainable development. Sustainability is, therefore, the key objective of many firms. It ensures the firm achieves the long-term objectives. Rotary international is an organization that operates across the globe and employs sustainability as a key factor in its operations. Different factors have thus affected the sustainability process of the Rotary international.

The relevance of mission and vision to the sustainability of the organization

Mission and vision statements of an organization play a significant role in the success of a company. The mission and vision statements of the company help ...

Introduction

Managers are constantly making decisions that affect the operations and the bottom lines of the business. Such decisions could include the stocks in which to invest, when to introduce a new product into the market, how to optimize the profits of a firm, how to assign employees to various tasks, and when to venture into new markets. Managers require information to make correct and timely decisions. Managerial accounting and financial accounting are potent sources of the information that managers require when making decisions. Managerial accounting entails the identification, measurement, and communication of the economic information that is needed by ...

Executive Summary

Implementations of care paths will/may help cut healthcare costs. This report argues that the adoption of the care path approach is necessary to ensure MGH's costs are sustainable, but to ensure success, a phased approach to implementation approach, stakeholder engagement, constant, communication, and use of formal change management models will help.

Summary of the Case

As one of the largest hospitals in the country and a pioneer of open-heart surgery, MGH its ability to rein the costs of one of the most expensive procedures would serve as an important guide for the rest of the industry. Its costs are higher than its competitors ...

Introduction

The pricing strategy should be an integral part of decisions in the marketing position, and it should depend on the overall development strategy of the business and marketing plans. Therefore, companies should not set one price but a pricing structure that should reflect on the variations in geographical demand, costs, the timing of purchase, requirement of market segments, order levels, the frequency of delivery, and service of contracts.

Why different pricing strategies are appropriate in some circumstances

Pricing is an important managerial decision, and most firms do not encounter pricing decisions in major ways on daily operations (Weygandt, Kimmel and Kieso, 2009, pp.59). However, there is a need ...

MANAGEMENT ACCOUNTING – COST CLASSIFICATION, VARIANCE ANALYSIS AND BUDGET PREPARATION

Executive Summary 4 1. Management Accounting, its Importance and Comparison to Financial Accounting 5

Management Accounting versus Financial Accounting 5

2. Different Classifications of Costs (Types, Behaviour, Function and Relevance) with Examples 6 a. Cost Classification by Behaviour 6

Semi-Variable Costs 7 Variable Costs 7 b. Cost Classification by Function 7 c. Cost Classification by Relevance 8 3. Variance Analysis Commonly Derived Variances, Problems and Limitations 9 a. Commonly Derived Variances 9

Material Cost Variance 10

Labour Cost Variance 10 Overhead Variance 10 Controllable Variance 10 b. Problems and Limitations of Variance Analysis 11 4. Different Operational Budgets and their Advantages 11 a. Master Budget 11 b. Operating Budget ...