HI5017 Managerial Accounting Assignment Solution

HI5017 Managerial Accounting Assignment Solution

HI5017 Managerial Accounting Assignment Solution

Introduction

The main motive of this report is to analyze that how the tool of management accounting helps in attainment of growth as well as success for an organization. In this report, two articles have been taken into consideration for the correct use of the standard costing so that the correct results for same can be revealed. Also, different questions are taken into consideration which has to be answered throughout the financial report so as to produce the better outcomes. The report compares both the studies in the later part so that the similarities and the variations between both of them can be identified and the conclusion for same can be determined accordingly. The findings and the outcomes of both the studies are also determined. This will help the managers of the organization in taking appropriate decisions related to the operations of the business. The knowledge that what is the significance of standard costing within the organization and how it is helpful to management accounting in the Australian Companies is given in the overall report.

An explanation of Standard Costing

The actual focus of all the organizations is to increase the profits and it can be achieved through two ways either by maximizing profits or minimizing the cost(Ahmed & Duellman, 2013). Standard costing is one of the techniques which compare the actual performance against all the standards set by the organization which are used for the performance appraisal and for smoothening its operations. The standard costing is one of the ways which helps in regulating the cost so that the profitability of organization can be attained. The internal part of the management accounting tool is obtained by the organization which is used for controlling and with it also includes the system of budgeting as well as the responsibility for the statements of accounting. The standard costing can be defined as the system of accounting which makes the use of the predetermined the cost that is related to the products or the services which are supplied (Abdullahj, et. al., 2015).

It has been observed that variance will be evaluated in the total cost of the product by excluding the fixed overheads that the standard costing when compared with that of the marginal costing technique then the. The standard costing is the cost which is predetermined that how much of the cost should be kept specific under all the working conditions, determined in the report. There are various types of the standard costing some of them includes attainable standard, an ideal standard, basic, current standard, labour standards and material. The resources should be set so that the maximization of the revenues can be done which in turn will help in maximizing the profits and cost of labour can also be controlled accordingly. The main motive of the management is to regulate the standards for the material and the cost of the materials (Lueg & Norreklit, 2012). The actual cost is compared with the standard costs so that the difference can be calculated and accordingly the actions can be taken by the managers so that the actual cost of the organization confirms with that of the standard cost (Abdullahj, et. al., 2015).

There are various benefits not only to organizations but the employees as well so that the accountability, as well as the effectiveness within the organizational structure, can be maintained when the standard costing is used in the organization (Ilg, et. al., 2016). Along with this, it also helps in determining the performance through correct monitoring so as to ensure the appraisal and also regulates the differences which help in analyzing the shortfalls and then takes actions so as to improve those for the future perspective (Akenbor and Agwor, 2015). It also helps in motivating the employees so as to achieve the organizational goals and objectives which are laid by the organization by creating the targets which are realistic. The prime advantage is that it helps in gaining fast and easily available reports to the management so that management can take the actions accordingly (Ahmed & Duellman, 2013).

The standards which are set by the organization may also get affected due to the changes in the price due to a persistent change in inflation which in turn leaves the standards to be unattainable. Apart from numerous benefits involved in the standard costing technique, it also includes numerous drawbacks which could be setting of the standards that are unreachable and are not desirable to achieve, instability in politics, due to changes in macroeconomic policies, issues in determining the needs of consumers, also the variation in the labor rate per hour in the organizations which basically relies upon the variables of economics (Akenbor and Agwor, 2015).

By the use of standard costing, calculation of the profits is also made possible which results in enabling the managers to take the important decisions for the organization accordingly. Later, the implementations for the improvements can be taken by analyzing the sectors which lead to the change. To enhance the productivity of the business the distribution of the resources to all the departments should be done in an appropriate manner which also leads to an increase in the efficiency. This is the actual method which will allow the management accountants to remove the irrelevant actions and take steps to maintain effectiveness.

Purpose of two studies and their research questions

The main focus of both the theories lies in the appropriate knowledge about the standard costing method. In the first theory, there is an explanation about testing the impacts of the standard costing on the acquisition of profitability of telecommunication companies so as to test the relationship among the standard costing and the profitability gained by the telecommunication companies (Miller-Nobles, et. al., 2016). To obtain the actual analysis of it, the descriptive survey method has been used. Analysis can be done with this the secondary data, as well as the interviews, are conducted (Ward, 2012). Later, the outcomes are determined which helps to conclude the final results. Analysis of the profitability can easily be done as this method also ensures that the data collected is correct and necessary for the business. The questions arise here is for the calculation of benefits for the use of standard costing so that the advancement in the profit gains of organization can be analyzed (Akenbor and Agwor, 2015). Another question which arises here is about the effective application of the standard costing so that its effect on the profitability can be determined. These reports are presented to the management as per the accounting reports which are prepared in advance (Demski, 2013). The actions should be taken by the top authorities and then the growth in the business can be achieved. To answer all the questions in the effective way the standard costing method will be used and also maximize the profits the cost control techniques will be used which in turn will help in achieving sustainability as well as profitability within the organization.

Another report focuses to study about the relationship between the cost control in the oil, the standard costing and gas industry of Nigeria. Primary as well as the secondary data both have been used such that the essential information can be concluded and the expediency of the study can be maintained. For determining the relationship, the hypothesis has been improved. The research question which has been taken care is about determining the cost controls if standard costing gets implemented within the organization (Akenbor and Agwor, 2015). The actual respondents of the individuals can be analyzed as the primary data is collected and then the questionnaires are improved and then actions for the future growth of the organization can be attained accordingly. The theory will also help in determining the various aims of the cost through which the cost can be controlled and the sustainability of the organization can be achieved. It has also been found that the firm is more efficient in terms of material, labour as well as overheads as much as the organization practices the standard costing technique (DRURY, 2013).

Therefore, it is seen in the above report that both the studies have elaborated about the standard costing. It will also help in understanding the standard costing in the systems of accounting so as to ensure that the resources are effectively and efficiently consumed and the cost of the organization is regulated. Also, the benefits, as well as the drawbacks involved with it, are also analyzed which will help the business to acquire success. This will also help in getting the analysis of the different areas so that the sectors of the development can be analyzed (Miller-Nobles, et. al., 2016).

Similarities and differences in two studies

On doing the analysis there were different observations which have been drawn from two of the theories and it has been found that there are some of the similarities in the observations of both while some of the variations were also included. These findings are analyzed so that it may help in drawing a proper conclusion as well as the calculation may be achieved.

The similarity which appeared in both the studies was related to the acceptance of the standard costing technique so that it bumps upon the organization which can be analyzed. Along with this, it has also been observed that both the organizations are using the proper accounting technique so as to conclude the better outcomes (Abdullahj, et. al., 2015). The primary as well as the secondary methods, to conduct the research is considered by both the theories. In both of the article the factors that lead to control the cost so that the profits, as well as the revenues of the organization, can be maximized. Along with all these considerations, the theories have also laid the impact upon the advantages of the standard costing as well as the shortcomings so that the effectiveness in the organization can be determined if this method is used by the organizations. The transparency within the organizational structure can be maintained on maximizing the profits by reducing the cost, it is the point which is focused in both the studies followed by the organizations. The ways through which the variances that have been occurred by comparing the actual results with the budgeted one can be removed are also explained in the articles as it will help in maintaining the accountability as well as the transparency within the organization. The details are given through the different steps in both the studies so that the organizational goals can easily be achieved by working on the variances involved and effectiveness can be maintained (Abdullahj, et. al., 2015).

There are some of the variations which have been observed in both of the studies that are the first article speaks about the application of standard costing in the sector of the telecommunication so that the cost of each product can easily be determined and the improvements in the profit of the organization can be made. Along with this, it has aimed at finding the relationship between the standard costing and cost control. Another research also focuses on establishing the provisions which are related to the information on factors that help in controlling the cost and removing the products which are not profitable. The main aim of this study has laid on finding the relationship between the both while the first study did not talk about the factors which helps in controlling the cost and relied much on emphasizing upon the attainment of profitability. They have obtained the result from its observations which shows that the more efficient the organization is when it practices more of the standard costing as it helps in managing the cost of resources within the organization which in turn also leads to the achievement of the productivity within the organizational structure (Kludacz-Alessandri, 2016). The results which are achieved from both the observations show that there are two types of the factors which are compared by studies so that the benefits received from them can be regulated which were not included in the first article.

It has been found that the management accountants within the organization have to take the correct and important decision for the organization so that proper policies for the future can be implemented. It also has been observed that both of the theories have produced the positive outcomes for the fulfilment of the standard costing methods within the organizational behaviour but there are some other dissimilarities which has appeared due to the differences in factors of analysis. The standard costing aims at making the standard planning by setting the benchmark for all the employees within the organization as observed into the studies (Akenbor and Agwor, 2015).

Outcome learnt from research

After taking out the research there are various outcomes which will help the management accountants to manage the resources accordingly have been obtained by the companies and then decisions are taken related to the future activities and the operations of the business can go in a smooth and effective manner (Kravet, 2014).

It is also found that the decision making process is also improved through the proper achievement of standard costing (Abdullahj, et. al., 2015). The description of the standard costing method information is essential in the organization as it helps the managers of the organization to take the correct decisions. The outcomes which have been attained by the study of the telecommunication area shows that the standard costing is used on a large scale in the telecommunication companies. Along with this it also helps in improving the planning of the organization by setting the correct benchmarks. It is observed that if the methods, as well as the principles of the standard costing, are implied to the MTN Company, then there are numerous chances of advancement for the profitability. It has also been found that the management reports are aligned and late presented to the high-level authorities or the management so that they can easily take actions according to the information available in these theories. The overall outcomes support that the results which are general aids in the advancement of the profits in the manufacturing companies.

The report which has been generated in the overall theory concludes that there is the proper relationship between the cost control technique the standard costing (Akenbor and Agwor, 2015). The various factors through which the connection between the costs controls as well as the standard costing are taken into consideration in another report. Along with this, it has also been found that as more and more the organization uses the standard costing the more effective and efficient the labour, materials and overheads of the organization (Islam and Hu, 2012).

It is also realized that the standard costing is the best tool through which the cost of the oil and gas industry will be regulated and the performance of the workers within the organization will be advanced for further growth and success (Kludacz-Alessandri, 2016). The standard costing method is recommended for firms of the oil and gas industry to adopt and also apply so that the efficient use of the resources can be maintained and the cost of the organization can be regulated in the efficient way (Hilton & Platt, 2013). Along with this, the management should also use the proper strategic measures for the adoption of the standard costing so that the sustainability of the firm can be achieved and effectiveness, as well as the assess ability within the organization, can be marinated.

Therefore, it can be concluded that both the articles provided the different results which will help the managers as well as the management accountants in making the correct decisions related to the organization. Along with this, it aims to provide the appropriate manner which will target to attain the organizational goals as well as the motives of the understanding about the benefits which is achieved by the organization through the accountants of management. (Ilg, et al., 2016).

For the telecommunication sector, in order to attain profitability, the organization of telecommunication must summarize that the standard costing method is essential as it will help in regulating the cost and achieving the success. The strength and weaknesses of the competitors are also regulated through standard costing as it helps in maintaining and obtaining the business strategy which in turn will help in achieving the profits within the organizational body (Akenbor and Agwor, 2015).

Conclusion

From the above scenario, it can be concluded that the overall report gave the information and understanding about the different aspects of the management accounting tool which is standard costing technique. Along with this, there are different benefits involved by implementing the standard costing technique within the organization. The purpose of the theory is also determined as it will help in determining the path of the research and its motives. It also gives the explanation about how the standard costing method also helps in making the advancements in profitability of the organization. The variation and the similarities between both the studies are also explained in the report. Furthermore, the observations which have been obtained from the research are also presented as it will help the management accountants in future goals.

References

1. Abdullahj, S.R., Oni, I., Ahmed, M.D. and Shakur, F.I., (2015) Effects of Standard Costing on the Profitability of Telecommunication Companies: Study of MTN Nigeria. Oman Chapter of Arabian Journal of Business and Management Review, 34(2611), pp.1-8.
2. Ahmed, A. S., & Duellman, S. (2013) Managerial overconfidence and accounting conservatism. Journal of Accounting Research, 51(1), pp.1-30.
3. Akenbor, C.O. and Agwor, T.C., (2015) Standard Costing and Cost Control in Nigerian Oil and Gas Industry. Journal of Modern Accounting and Auditing, 11(4), pp.185-193.
4. Demski, J. (2013) Managerial uses of accounting information. Germany: Springer Science & Business Media.
5. DRURY, C. M. (2013) Management and cost accounting. Germany: Springer.
6. Hilton, R. W., & Platt, D. E. (2013) Managerial accounting: creating value in a dynamic business environment. Australia: McGraw-Hill Education.
7. Iacob, C., & ?aicu, M. (2012) Managerial Accounting And Environmental Performance Of Bakery Companies. Scientific Bulletin–Economic Sciences, 11(1), pp.16-24.
8. Ilg, P., Hoehne, C. and Guenther, E., (2016) High-performance materials in infrastructure: a review of applied life cycle costing and its drivers–the case of fiber-reinforced composites. Journal of Cleaner Production, 112, pp.926-945.
9. Islam, J., & Hu, H. (2012) A review of literature on contingency theory in managerial accounting. African Journal of Business Management, 6(15), pp.5159-5164.
10. Kludacz-Alessandri, M., (2016) The role of cost accounting in setting prices in Polish and English hospitals. The 10th International Days of Statistics and Economics. Conference Proceedings, Löster Tomáš, Pavelka Tomas.
11. Kravet, T. D. (2014) Accounting conservatism and managerial risk-taking: Corporate acquisitions. Journal of Accounting and Economics, 57(2), pp.218-240.
12. Lueg, R., & Norreklit, H. (2012)Performance Management measurement systems-Beyond generic strategic actions.
13. Maher, M. W., Stickney, C. P., & Weil, R. L. (2012) Managerial accounting: An introduction to concepts, methods and uses. USA: Cengage Learning.
14. Miller-Nobles, T.L., Mattison, B. and Matsumura, E.M., (2016) Horngren's Financial & Managerial Accounting: The Managerial Chapters. Australia: Pearson.
15. Ward, K. (2012) Strategic management accounting. Germany: Routledge.