1. The group is required to undertake a project on a management accounting topic related to the course (refer attachment). The objective of the project is to provide students an opportunity to gain an in-depth knowledge of the theoretical underpinnings of one of the management accounting topics and to summarize any current articles of the topic (the chosen articles must be accepted by your lecturer).
2. The group projects may be done in groups of at most five students (you may choose you own group members). Each group will be entitled with one group project (see Attachment A).
3. The assessment marks for the group project is equivalent to 20 marks.
4. The group project report should be submitted to lecturer in class not later than week 10. Late submission of the term project will not be entertained, i.e., a grade of ZERO will be assigned.
5. The group project report should follow the guidelines below: a) Written in English language
b) Computer typing Arial, Font 12, 1.5 line spacing
c) Properly cited and follow the APA referencing style (http://apastyle.org/)
6. Criteria for grading the written group projects is as follows:
a) Good writing quality
b) The presentation style of a group project report
c) Demonstration of appropriate citing in use of source materials
d) Evidence of group effort
e) Clarity, precise and thorough analysis in demonstrating the group project report
7. Minimum 25 pages.
GROUP PROJECT QUESTION (20 marks)
1) Management Accounting –
(A) How has the technology changed the work of management accountants? What other business trends are influencing managerial accounting today? How do these other trends impact management accountants’ roles in the organization.
(B) Find a recent news article on an ethical issue. You have to write a summary of the article and how financial and managerial accountants could have used information to detect the activity.
2) Performance evaluation system –
(A) Explain why using financial statements as the sole performance evaluation tool for a company is probably not a good idea. What issues can arise from using only financial measures for performance evaluation?
(B) Obtain published financial statements of two manufacturing companies within the same industry. Compare and contrast their income statements and balance sheets. How does the cost of goods sold vary for the two companies? What are the gross margin percentages for the companies? How would manufacturing companies determine the price to charge their customers? How does this compare to a service organization? Provide examples of product costs and period costs?
3) Balance Scorecard –
(a) List and describe the four perspectives found on a balance scorecard. For each perspective, list at least two examples of KPIs that might be used to measure performance on that perspective.
(B) Find a recent news article on Balance scorecard. You have to write a summary of the article.
4) ABC –
(A) Discuss the current issues in Activity Based Costing (ABC) implementation. Why most of the companies do not adopt ABC system in their production line/companies.
(B) You are required to find websites of other businesses that use activity-based costing. Identify specific concerns that the business may have in using activity based costing. Provide examples of how activity-based costing has improved the business. What was the purpose of establishing ABC within the business?
5) Traditional Management Accounting Technique –
(A) List, describe and discuss the traditional management accounting technique. Explain why traditional management accounting technique is said to be inappropriate to be used in contemporary business?...
...an organizations goals. Managerial accounting is an integral part of the management process, and managerial accountants are important strategic partners in an organizations management team. Four fundamental management processes that help organizations attain their goals Decision making, Planning(developing a detailed financial and operational description of anticipated operations)., Directing operational activities (means running the organization on a day-to-day basis), Controlling(ensuring that the organization operates in the intended manner and achieves its goals) Managerial accountants add value to an organization by pursuing five major objectives (1) Providing information for decision making and planning, and proactively participating as part of the management team in the decision-making and planning processes (2) Assisting managers in directing and controlling operational activities (3) Motivating managers and other employees toward the organizations goals (4) Measuring the performance of activities, subunits, managers, and other employees within the organization (5) Assessing the organizations competitive position, and working with other managers to ensure the organizations long-run competitiveness in its industry Managerial vs. Financial Accounting The focus of managerial accounting is on the needs of managers within the organization, rather than interested parties...
...changes and effects different future business decisions and alteration of those decisions have on the expenses and profit but. Although there are benefits to finding and fully understanding these relations there might be problems on the way which will be discussed further on.
After reaching an understanding about the relationship between costs and business activities and analyzing cost behaviors, we could then use those information for predicting future profit changes due to changes in volume of activity, costs and prices of products. What effects can this manufacturing company expect on their profit if they add a new production line or they alter the machines and variable expenses change? All these questions are addresses using managerial accounting technique called cost volume profit.
2-1 Cost Behavior, benefits and difficulties ahead
Change in organizations activity like designing or producing new type of clothing can affect costs of this manufacturing company. The relationship between costs and activity is called cost behavior or cost function. Providing knowledge of cost behavior helps the managers to make more accurate cost predictions. Which ultimately serves as a tool for managers in this organization for planning, controlling and decision making. Which needs the prediction of costs, prices and how they are effected by changing activity volumes. (Hilton and Platt 2014)
But different costs demonstrate different cost behavior patterns. We...
...Running Head: MANAGEMENTACCOUNTING
The Management Accountant in Business
[Name of the Writer]
[Name of the Institution]
The Management Accountant in Business
Tesco Public Limited Company is a merchandising retailer and a grocery retailer multinational chain which has it’s headquarter in Cheshunt in the United Kingdom. Tesco as compared to its counterparts, Walmart and Carrefour, is the world’s third largest retail store with regard to the revenues that it generates. Tesco stands as the second largest retail stores of the world with regard to its profits, with Walmart being the first. Tesco has its retail stores spread across almost 14 countries of the world of Asia, North America and Europe. Tesco public limited company is the market leader in its home country United Kingdom with a market share of almost 30%. Tesco was founded by Jack Cohen in 1919 which operated as a group of stalls in the market. After its inception today Tesco plc operates across diverse areas of clothing, electronics, furniture, books, financial services and internet services.
Tesco is listed at the London Stock Exchange and is a part of the FTSE 100 index having a market capital of approximately £24.4 billion and a symbol of TSCO. Tesco has been operating with seven business segments, namely, Tesco Superstores, Tesco express, Tesco metro, Tesco extra, One stop, Tesco Homeplus, and Dobbies. The market share of Tesco as recorded...
David Xu Id: 65990771
Session Preparation Assignment (SPA) #2
Understanding Key Cost Relationships
1. Read Chapter 2 of SN, Key meanings in the Chapter.
Understanding key cost in a firm is the most important issue in managementaccounting. That is because business survives on value exchange.
Customers and business are willing to exchange money and services (products) based on the costs. How products cost can effect a firm’s financial health is very important for managers.
Cost objects are the different aspects of a firm’s operation, or products, it is essential concept in managementaccounting.
If not properly handled, cost objects can hinder, not help, the manager to understand to company’s reality. The example here is very easy to explain the situation. Also cost objects are vital to planning, motivation, and controlling.
In some cases, manager makes decision to close or open new store in a region based on the cost objects.
We can also see products as cost object, normally happen in manufacture business.
Because accrual accounting makes a number of judgement and assumptions and all that are subjective, so it is common that managers sometimes understate or overstate a company’s profits in a period.
Direct cost and indirect cost VS Raw Material and Maintenance cost
The main business in NZ and Australia...
* Managementaccounting refers to accounting information developed for managers within an organization.
* In other words, managementaccounting is the process of identifying, measuring, accumulating, analyzing, preparing and communicating information that helps managers fulfill organizational objectives.
* In contrast, financial accounting refers toaccounting information developed for the use of external parties such as stockholders, suppliers, banks, and government regulatory agencies.
Differences B/n Financial and Managerial Accounting
1) Primary Users
2) Purpose of Information
3) Focus and Time Dimension of the Information
4) Type of Report & freedom of choice
Objective 2 - Name the types of questions an accounting system helps to answer
* Scorekeeping: Evaluate Organizational Performance
* Attention Directing: Compare Actual Results to Expectedn-Attention directing means reporting and interpreting information that helps managers to focus on operating problems, imperfections, inefficiencies and opportunities
* Problem Solving: Assess Possible Courses of Action - Problem solving is commonly associated with nonrecurring decisions, situations that require special accounting analysis or reports
Objective 3 -Distinguish service...
Toyota – brake failure even though standards were followed, the standards weren’t revised – RIGID
Shree Renuka Sugars Ltd. ‘turned around every single one of its sick leased units, creating viability out of a liability.’
Reached the point where between 70% and 80% of the costs assigned to the final cost objectives of a manufacturing or engineering line organisations were allocations from common overhead pools
‘Because technology related costs were buried in overhead, this approach tended to move the dollars from areas with higher technology costs into units with the larger direct labour elements.’
‘we are moving from a functional enterprise to one organised around product processes.’
‘But it’s the direct, measurable, cause-and-effect link back to the business unit’s products that was missing.’
‘Today, the organisation can exercise significant influence and control over the costs it incurs.’
‘the business manager has a much broader sphere of influence in which to exercise control and make improvements within the business unit.’
‘business units need to understand their cost drivers to increase product quality, cut costs, improve customer response time and so on.’
‘process accounting supports other concepts in our continuous process improvement strategy, including total accountability, responsibility and control; flexibility; and total cost tied to customer value.’
...COST CLASSIFICATION ASSIGNMENT
To classify the various costs would first of all require a definition between the two types of accounting that practically all businesses have to face and a number of key terms which are equally important. These are managementaccounting and financial accounting.
1. THE DIFFERENCE BETWEEN MANAGEMENT & FINANCIAL ACCOUNTING:
Managementaccounting is concerned with decision making, cost apportionment, planning and control. It is based within the organisation and is solely for the use of the managers to conduct their business dealings. The process of managementaccounting is proactive meaning the company is looking ahead, not backwards.
Financial accounting on the other hand is externally based and is primarily concerned with the preparation of financial statements for organisations' stakeholders. Stakeholders would include shareholders and competitors. Unlike managementaccounting it has to comply with various financial legislations and standards. Financial accounting concerns using data from previous years which also means that the information which is used is generally out of date.
2. HOW ARE ALL THE COSTS CLASSIFIED?
To classify costs would require a number of key terms to be defined; all of which should be understood fully in...
...Managerial Accounting Overview
Measures, analyzes, and reports financial and non financial information non-financial that helps managers make decisions to fulfill the goals of an organization organization.
IFRS/IAS-based Financial Reports
Generally, cannot be used for the day-to-day d t d goals of the managers.
Financial vs Managerial Acctg
Primary users Focus and emphasis Rules of measurement and reporting Level of detail Managers (Internal) Future-oriented Need not follow GAAP Emphasizes detailed segment reports about departments, products, and customers. Emphasizes relevance. Emphasizes timeliness.
External users Past-oriented Must follow GAAP Emphasizes summary data concerning the entire organization Emphasizes objectivity and verifiability. d ifi bilit Emphasizes precision.
Other points of emphasis
What is Cost?
Cost is a resource sacrificed or forgone to achieve a specific objective (i.e., not necessarily for profit).
General Cost Classifications
Classification on the financial statements
General Cost Classifications
Classification on the financial statements
DIRECT LABOR MFG OVERHEAD
General Cost Classifications
Classification on the...