Part II Select at least three of the five topics identified below: Cost Manageme
ID: 2425037 • Letter: P
Question
Part II Select at least three of the five topics identified below:
Cost Management Techniques
Costing Methods
Capital Investment Decision Techniques
Budgeting
Quality Control
For each topic selected, present real world examples of the application of managerial accounting techniques within a business or organization. Examples may be gathered from your own professional experiences or from case studies obtained from credible sources (excluding textbook examples explored in previous weeks). Presentation of each example should include how a managerial accounting technique was applied in the business or organization’s decision-making model. Be sure to support your example with calculations when applicable.
Explanation / Answer
Quality control (QC) is a method used to ensure that a manufactured product or performed service are accordance with a defined set of quality criteria or it will meets the requirements of the al the consumers or customer.
Under Quality control main focus will be given to testing of products and reporting to management who make the decision to allow or deny product release, where the product are as per defined quality assurance then it will be release by management. Management will be whole responsible for the quality control of any product.
Quality control of any product: for example Nestle Company facing a problem when maggi will not as per proper quality while checking at the time of testing.
Budgeting: Budgeting is one of the essential tool used by business executives for the purpose of planning and control. Budget will generally prepare on the basis of estimates. Any figure which is estimated may be more or less from actual. Budget are prepared by the management of the company to attain certain objective. Budget may include income, expenditure, employment of capital ete.Budget are prepared in advance for future action and its relates to future period. It is a statement prepared in monetary and physical units. Budgeting is very wide term it includes sales budget, purchase budget, material usage budget, cash budget etc.
For Example: Sales Budget may be prepared on the following lines:
1. Products or group of products
2. Areas, Salesmen and agents wise
3. Types of customer
4. Period wise like month, weeks etc.
ABC COMPANY
Sales Budget for the year ending march 2015
Units Selling Price Total
Product X 4000 $ 70 $2,80,000
Product Y 3000 $ 20 $ 60,000
Costing Methods: Today business and various types of industry uses different methods of production so its needs costing methods to meet their individual requirements. Generally it is not possible to use one type of method to all types of industries, so we need different costing methods.
Different costing method is used depending upon the types of manufacture and their nature.
Mainly industries are of two types, one used job work and another manufactured products.
Under job work each work will be different from another and it is on the basis of customer specification. The method of costing and ascertaining cost of each job is known as job costing, contract costing and batch costing.
Example of such types of industries is bridge, manufacture of heavy machinery, software making companies etc.
Industries uses regular production of similar type of products .Method of costing used for ascertain costs are: Process costing, Single costing, Operating costing.
Example of such type of industries are chemical industry, paper industry etc.