COST AND MANAGERIAL ACCOUTNING

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COST AND MANAGERIAL ACCOUTNING 2012

TABLE OF CONTENTS:
QUESTION NUMBER 1:.................................................................................................................................. 2 PART A: ...................................................................................................................................................... 2 PART B: ...................................................................................................................................................... 3 MANAGERIAL AND FINANCIAL ACCOUNTING: .......................................... Error! Bookmark not defined. DIFFERENCE BETWEEN MANAGERIAL AND FINANCIAL ACCOUNTING: ..... Error! Bookmark not defined. PART C: ...................................................................................................................................................... 4 QUESTION NUMBER 2:............................................................................... Error! Bookmark not defined. PART A: ....................................................................................................... Error! Bookmark not defined. SOLUTION:.................................................................................................. Error! Bookmark not defined. PART B: ....................................................................................................... Error! Bookmark not defined. EXPLANATION: ........................................................................................... Error! Bookmark not defined. PART C: ....................................................................................................... Error! Bookmark not defined. TOTAL ALLOCATED COST OF SERVICE DEPARTMENTS FOR EACH OPERATING DEPARTMENT: ....... Error! Bookmark not defined. EXPLANATION: ........................................................................................... Error! Bookmark not defined. PART D:....................................................................................................... Error! Bookmark not defined. DIRECT COST: ............................................................................................. Error! Bookmark not defined. AVOIDABLE COST: ...................................................................................... Error! Bookmark not defined. DEPRECIATION ON MACHINERY: ....................................................... Error! Bookmark not defined. SALARIES OF DIRECT LABOR IN THE COMPANY: ................................ Error! Bookmark not defined. INSURANCE ON EQUIPMENT AND MACHINERY: ............................... Error! Bookmark not defined.

PART E: ....................................................................................................... Error! Bookmark not defined. COST DRIVER: ......................................................................................... Error! Bookmark not defined. IMPORTANT FACTORS IN DETERMINING APPROPRIATE COST DRIVER: .... Error! Bookmark not defined. SEQUENTIAL METHOD: .............................................................................. Error! Bookmark not defined. TIME RELATED TO COMPLETE ACTIVITY: ................................................... Error! Bookmark not defined. RECIPROCAL METHOD: .............................................................................. Error! Bookmark not defined. DIRECT METHOD OF ALLOCATION: ............................................................ Error! Bookmark not defined. PART F: ....................................................................................................... Error! Bookmark not defined. MEMO ........................................................................................................ Error! Bookmark not defined. 1 ASIA PACIFIC UNIVERSITY

COST AND MANAGERIAL ACCOUTNING 2012

REFERENCES: .............................................................................................. Error! Bookmark not defined.

QUESTION NUMBER 1:
PART A:
When an employee of an organization wants to serve its customers in an effective and efficient way then he should be concerned in the time which he took to perform those activities and they should also be concerned with the quality of the service which he is offering. Time is concerned as the most important factor in any business because mostly customers are time oriented and they want every work to be done within the time. When there is standard time in the routine jobs of employees in super printing company then they can observe the actual and standard time to conclude those areas in which they can improve the performance time and by this they can provide better services to their customers. Customers become loyal to those organizations that perform their business activities on time with good quality. In super printing company the information on the actual time in which employees performed jobs can be analyzed or reported per day or on per job basis. Employees should do appraisals on weekly or monthly basis in which can add feed back forms to understand the view of customers on their quality of work done. These feed back forms should also include other informations such as employee behavior, timed and price of products so employees can get clear cut view of customers on their prices of products and their service. These forms will also help them to set prices according to the feed backs received from customers. These feedback appraisals can be very annex by using express and informal feedback every time a customer comes up with a job. Employees can also ask customers to give short term interviews to understand their product service and quality. When an employee wants to serve better he should only look at the time in which he perform activities and employees should become time oriented and value the precious time of their customers and in this way they can serve better and they can create loyal customers for their business.

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COST AND MANAGERIAL ACCOUTNING 2012

PART B:
FINANCIAL AND MANAGERIAL ACCOUNTING:
MANAGERIAL ACCOUNTING: Managerial accounting is a form of accounting which is concerned with the providing vital information to managers of an organization and to those who control operations inside of an organization. Managerial accounting provides vital and crucial information from which organization can get view of their business and use this information to run their business operations

FINANCIAL ACCOUNTING: Financial Accounting is different from managerial accounting as it is related to provide information to stakeholders, shareholders, creditors and to those who are related to this organization. Basically financial accounting provides the information of organization on its financial success such as its financial reports on which customers and shareholders can judge its performance

David Tanka is the manager of super retail outlet store which needs to analyze the overall impact and profits generated by the outlet. If manager want to earn more money at first he needs to cut down its expenses and should minimize the purchasing costs for their products for their revenue which is generated by the outlet and by this way manager can understand the revenue of each section of the outlet. David Tanka should understand the non-financial and financial performance evaluation on their store. Super printing manager should look at the information on their operational control such as product costs, quality of work done and efficiency. David Tanka need to have daily report on their products and costs; this will make it easier to understand the profit generated areas.

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COST AND MANAGERIAL ACCOUTNING 2012

David Tanka wants to assay the enterprise based information about the costs of their products and their profits generated from document preparation, black and white photo-copying services, facsimile services, color copying of notes, computer rental to college or university students and selling notes to students. David Tanka should look into their major customers from which they can generate high profits such as university or college students. As they are working near college they should set prices which are student oriented and they can pay easily. Manager should get detailed information before setting the prices. David Tanka should understand the management accounting needs such as he needs to understand the product lines which are most profitable and this can help him to promote those product lines among customers. To monitor the sales trend in super printing outlet David Tanka should collect information on their sales at the end of each day or each week to make decisions about the working hours of employees. Manager should provide flexible working hours to its employees so they can also feel related to organization. Manager should provide better conditions to both customers and employees of outlet and he should allocate jobs in a sound way so that during the high demand time employees can work effectively and provide better services to their customers.

PART C:
For the president of super printing company the management accounting information needs should be related to the summary of statistics, such as weekly or monthly productive reports and efficiency reports of the retail outlet. President should look into the statistics which should involve revenue which is generated by employees, expenses of outlet and detailed reports on the products and services, 4 ASIA PACIFIC UNIVERSITY

COST AND MANAGERIAL ACCOUTNING 2012

customer valuation feedbacks and customer response time. From the outlet, president should look into the earning per customers and the number of customers the outlet have on per day and per month basis. President of the organization needs to understand the profitability of all outlets so he can understand which outlet is more profitable and which outlet is not performing so he can find out the problems associated with those outlets. As the printing outlet in which David Tanka is the manager is operating near a school, so the parent company has asked David if there outlet is performing well they will open some more outlets nears universities and colleges. For this purpose the president of the parent company has asked David to provide their detailed information on their revenues and after David forward the complete information the president will look into the accounts to get view about the profits. Apart from his view, president will also consult and discuss the reports of super printing with its managers to get detailed view on either opening of new outlets is good decision for them or no.

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