Accounting
Content
Content 1
Introduction 1
1.Task one 2
The models and concepts affecting the pricing decisions taken by organisations, critically reflecting upon their usefulness 2
2, Task two 6
The role of standard costing and variance analysis in management accounting and a critically discussion of the value and limitations of variance analysis as a means of identifying key areas which have contributed to the overall profit figure. 6
3, The advantages and disadvantages of introducing an Activity Based Costing system to replace the current Absorption Costing system. 8
Conclusion 12
Reference lists 13
Bibliography 14
Introduction
Manac plc is a large, fictitious company which produces and sells a range of standard electrical goods. Also Manac plc is a transnational enterprise. The company uses standard costing and absorption costing. Due to the actual profits may be not satisfied with the budgeted profits. The board of directors has decided to find, analyze the potential reasons and may find a proper method to replace the existing costing system. There is a report from financial director and to explain the situation and find potential reasons. Therefore, it is vital to analyze the existing costing methods which include standard costing and absorption costing. The report will identify the values and limitations of those two costing methods and find the potential reasons from this point. Moreover, the report will find a way out to fix the issues and help organization to achieve its budgeted profits. Due to analyze the costing method, company could change its pricing method or costing method to improve profits. Thus, there may be a chance to transfer Absorption Costing system to Activity Based Costing system. It is important to understand this new system and find the strength and weakness from changing the system. From the structure of the report, it will be divided into explanation of the models of concepts which could affect the pricing decisions,
Content 1
Introduction 1
1.Task one 2
The models and concepts affecting the pricing decisions taken by organisations, critically reflecting upon their usefulness 2
2, Task two 6
The role of standard costing and variance analysis in management accounting and a critically discussion of the value and limitations of variance analysis as a means of identifying key areas which have contributed to the overall profit figure. 6
3, The advantages and disadvantages of introducing an Activity Based Costing system to replace the current Absorption Costing system. 8
Conclusion 12
Reference lists 13
Bibliography 14
Introduction
Manac plc is a large, fictitious company which produces and sells a range of standard electrical goods. Also Manac plc is a transnational enterprise. The company uses standard costing and absorption costing. Due to the actual profits may be not satisfied with the budgeted profits. The board of directors has decided to find, analyze the potential reasons and may find a proper method to replace the existing costing system. There is a report from financial director and to explain the situation and find potential reasons. Therefore, it is vital to analyze the existing costing methods which include standard costing and absorption costing. The report will identify the values and limitations of those two costing methods and find the potential reasons from this point. Moreover, the report will find a way out to fix the issues and help organization to achieve its budgeted profits. Due to analyze the costing method, company could change its pricing method or costing method to improve profits. Thus, there may be a chance to transfer Absorption Costing system to Activity Based Costing system. It is important to understand this new system and find the strength and weakness from changing the system. From the structure of the report, it will be divided into explanation of the models of concepts which could affect the pricing decisions,
Bibliography: Batty J (1970) Managerial standard costing. London: Macdonald & Evans. Drury C (1999) Costing: an introduction, 4th edition. London: International Thomson Business. Don T. et al. (1982) Management accounting: a decision emphasis, 3rd edition. New York: Wiley. Glad E and Becker H (1996) Activity-based costing and management. Chichester: Wiley. Norman B. et al. (2010) Management accounting and control systems: an organizational and sociological approach, 2nd edition. Chichester: John Wiley. Pizzey A (1989) Cost and management accounting: an introduction for students, 3rd edition. London: Paul Chapman.