This article looks at the role, management accounting can play in an organization and then to see what sort of qualification/criteria require if an organization recruits a management accountant.
It is important to understand that management accounting or also known as managerial accounting is an activity that is carried WITHIN an organization. It is not […]

Notes:
The traditional techniques of profit reporting are marginal costing and absorption cost. These two techniques have different impacts on profit (and stock) because of the way they treat fixed costs.
In marginal costing:

Fixed costs are treated as period cost and is written off to the Income Statement in the period incurred.

Marginal costing involves ascertaining marginal cost […]

Company A for the year ending 31/12/06 produced 11,000 unit of Product X but only 10,000 units were sold at $20 each.
More data as follows:

(a) Manufacturing costs
$

Direct material
6 per unit

Direct labor
4 per unit

Variable overheads
2 per unit

Fixed overheads
$22,000/year

(b) Selling & Distribution
$

Variable cost

1.50 per unit

Fixed cost

$20,000/year

© General Expenses (assuming all fixed expenses)

$15,000

Assume that actual overheads = budgeted.
Question:
(a)   Prepare […]

Refer to Accounting Test Question No.ABC2
 

(a) Computation of the activity based overheads
Step 1: Compute cost per unit of cost driver
= Cost pool / cost driver volume

Activity

Cost pool (a)

Cost driver volume/yr (b)

Cost/unit of cost driver (a)/(b)

Purchasing

$75,000

1,500

$50/purchase order

Setting

$112,000

2,800

$40/batch

Materials handling

96,000

8,000

$12/movement

Inspection

$70,000

2,800

$25/batch

Machining

$150,000

50,000

$3/machine hour

Step 2: Compute the volume of cost drivers consumed by Product XX

Purchase orders (given) =25

Batches=15,000/100=150

Materials movement=150 batches […]

Company XYZ has 6 standard products from stainless steel and brass.
The company’s most popular product is Product XX

 
 
 
The following are Product XX’s data for next year budget:
 
 
 
 
 
 
 
 
 

Activity
Cost Driver
Cost driver volume/yr
Cost pool

Purchasing
Purchase orders
1,500
$75,000

Setting
Batches produced
2,800
$112,000

Materials handling

Materials movements

8,000

$96,000

Inspection

Batches produced

2,800

$70,000

Machining costs
Machine hours
50,000
$150,000

Purchase orders
25

Output
15,000 units

Production batch size
100 units

Materials movements per batch
6

Machine hours per unit
0.1

Required:
(a) Calculate the budgeted overhead costs using […]