Management accounting is a new integrated part of the economic knowledge where the main goal is the informative and analytical support of the managers of the economic organizations to make the effective management decisions on the rational use of all production resources. The notion of accounting is a reflection of the results of the economic and financial activities of enterprises or individuals on the basis of documents with the different measurements (quantitative and qualitative). The management accounting assignment sample below possesses all these characteristics and shows the integral analysis of the economic processes.
As a matter of fact, the controllable costs are the costs within the prescribed amount for the period (usually one year), which do not have a pronounced dependence on the production volume, for example, costs of training, professional development, and consulting services. These costs can be significantly adjusted and changed at the will of the stakeholders. Thus, in management accounting, all the employee’s efforts are directed at regulating the level of these costs. Correspondingly, the process associated with the adjustable costs is called “black box”, as it is difficult to detect them. Its structure can be hidden or inaccessible (for example, spending on education, research, and culture). The result of the regulated costs can be any kind of information: written or oral advice, comments of accountants, lawyers, marketers, and workers of the Research Department.
In their turn, the non-controllable costs are the spendings, the value of which cannot be influenced by anyone. Some costs may not be fully under the control of the individual worker who may not be in the best position to affect the level of costs. In the Table 1, there are some examples of cost items and their division into controllable and non-controllable.
Classification of Controllable and Non-Controllable
|№||Cost items||The contractor||Classification|
|1||The costs of raw materials used for production||The controller of plant for the production||Adjustable (production)|
|2||The costs of paper in printing||Foreman||Controllable|
|3||The cost of advertising travel company||The company administrator||Non-Controllable|
|4||Costs for accounting and data processing for a trading company||The administrator of a trading company||Non-Controllable|
Based on the data in Table 1, it is necessary to calculate the required figures for the year.
The Source Data
|№||Indicators||Units||Initial data and calculation results|
|2||The volume of production||items||100|
|3||Specific consumption of direct materials per unit of manufactured products||kg||2|
|4||Just used direct materials (2 х 3)||kg||200|
|5||The products sold||$ K||43680,0|
|6||The rest of the finished product||$ K||2097,0|
|7. The cost for the year, including:|
|7.1||Direct material||$ K||14000,0|
|7.2||Direct labor||$ K||3000,0|
|7.3||For energy||$ K||500,0|
|7.4||Indirect labor||$ K||2600,0|
|7.5||Other indirect manufacturing||$ K||3200,0|
|8||Total production cost||$ K||23800,0|
|9||Non-manufacturing (sales)||$ K||16285,0|
|10||Full cost of sales||$ K||40085,0|
|11||The unit cost of production (10: 2)||$ K||400,85|
|Required to calculate:|
|12||Balance of direct materials at the end of the year (7.1 : 5 х 6)||$ K||672,1|
|13||Production costs for the year (8 – 7.6)||$ K||23300,0|
|14||The number of units of finished goods at the end of the year 6 : (5 : 2)||$ K||4,8|
|15||The sales price per unit 5 : (2 – 4)||$ K||448,82|
|16||Profit from operating activities (5 – 10)||$ K||3595,0|
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