Management Accounting Techniques- UCK Furniture Group
University: The London College
INTRODUCTION
In present business environment requirement of Management accounting techniques and methods assist managers and accountants to sort out the complex issues and conflicts within the organisation which remain associated with analysing the financial plans and opportunities. How use of financial information and details are utilised for better advancements and achievement of tasks are defined in this report. There is a utilisation of financial resources and information for better accomplishment of tasks and projects are also considered in this context. Various financial issues and their valuable measures are analysed in terms of overcoming financial conflicts are also analysed in this report. UCK furniture group is one of the furniture manufacturing organisation in the UK.
TASK 1
1.1 Cost using appropriate techniques of cost analysis to prepare an income statement
It is very important for organisations to make effective strategies and plans for development and growth of organisation. Cost accounting is more dependable aspect which is used in organisation to decelop the strategies andplans which are utilized and add up to unit. Expenses of creating items in regard to report the cost of stock on their individual arrangement, for example, monetary record and aggregate expenses of items sold. Financial information and details are mainly associated with effective utilisation of financial information and details are also analysed for effective use considered. Each cost that are utilised by organization in their day by day generation units are either specifically or in a roundabout way have effects on general productivity of an association. Cost is for the most part said that estimation of cash caused to get something. Get assignment writing services online
Costing is an effective techniques of accounting which would be useful for the purpose of assembling and recording every crucial elements of cost those are being incurred for the purpose of attaining a specific objectives. This would be helpful in providing proper analysis of cost behaviour, operational and capital budgeting, standard costing and many more. There are different costing methods which will be useful in analysing total cost for UCK group. Some of them are explained as follows:
Variable cost and fixed cost: These are said to be that costs which would remain unchanged in their total volume changes but in some time. it get varies with increase in alteration of total costs derives. While in case of variable costs they are continuously changes with production of goods and services. Some valuable examples are fuel and repair expenses.
visit this sample:- Concept of Financial Accounting
| NET INCOME AS PER ABSORPTION COSTING: | January | February |
| Sales (35per units) | 315000 | 402500 |
| less: | ||
| Cost of Production (12+8+5+1.82) | 295020 | 254790 |
| Gross Profit | 19980 | 147710 |
| LESS: | ||
| Fixed and variable cost: | ||
| variable sales overheads (1 per unit) | 9000 | 11500 |
| Fixed selling cost | 2000 | 2000 |
| Total costs | 11000 | 13500 |
| NET INCOME AS PER ABSORPTION COSTING: | 8980 | 134210 |
Computing net profit by using marginal costing
| PARTICULARS | January | February |
| Sales (35 per unit) | 315000 | 402500 |
| less: | ||
| Cost of Production (12+8+5) | 275000 | 237500 |
| variable selling overheads (1 per unit) | 11000 | 9500 |
| variable cost | 286000 | 247000 |
| Contribution | 29000 | 155500 |
| less: | ||
| fixed manufacturing overheads | 20000 | 20000 |
| Fixed Admin & selling cost | 2000 | 2000 |
| total fixed costs | 22000 | 22000 |
| NET INCOME AS PER MARGINAL COST | 7000 | 133500 |
TASK 3
3.1 Compare how organisation could use management accounting to respond financial problems
| Ratios | Formula | UCK furnitures | UCK woodworks |
| ROCE (Return on capital employed): | Operating profit/Capital employed*100 | 5890+3600/23100+31930*100 =9490/55030*100 =17.24% | 6955/81230*100 =8.56% |
| Operating profit margin | Operating profit / sales *100 | 9490/13000+24900*100 =25.03% | 6955/81230*100 =8.56% |
| Assets turnover | Revenue / Net assets | 13000+24900/23106+31930 =0.68 times | 8150/81230 =0.100 times |
UPTO
56%
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