Management Accounting Advanced Management

Question: Discuss about the Management Accounting for Advanced Management. Answer: Part 4: Calculating cost of cakes: Month Month days Total Cakes Direct Labour hours Direct Labour Costs Oven Hours per day Oven Hours per month Total Electricity Cost Rent Other Expenses 1 31 9,800 88,200 29,400 17.07 529.20 4158.0 2500 8000 2 28 8,000 72,000 24,000 15.43 432.00 3430.6 2500 6000 3 31 7,000 63,000 21,000 12.19 378.00 3029.1 2500 5500 4 30 6,500 58,500 19,500 11.70 351.00 2849.6 2500 7500 5 31 7,200 64,800 21,600 12.54 388.80 3178.5 2500 7536 6 30 7,000 63,000 21,000 12.60 378.00 3132.9 2500 9565 7 31 8,000 72,000 24,000 13.94 432.00 3547.4 2500 9676 8 31 8,300 74,700 24,900 14.46 448.20 3686.7 2500 10007 9 30 8,500 76,500 25,500 15.30 459.00 3702.5 2500 7589 10 31 9,000 81,000 27,000 15.68 486.00 3862.4 2500 6700 11 30 9,500 85,500 28,500 17.10 513.00 4037.4 2500 9900 12 31 10,000 90,000 30,000 17.42 540.00 4286.2 2500 10000 Total 98,800 14,820 296,400 175 5,335.20 42,901.30 30,000.00 97,973.00 Explaining difference actual and budgeted values: Particulars Actual Amount Budgeted Amount Number of cakes 98,800 115,000 Total oven hours 5,335.20 6,210 Total labour hours 14,820 17,250 Total labour costs 296,400 $345,000 In addition, the above table mainly states the overall difference in actual and budgeted amounts of the cake company. Moreover, the cost structure of the company is mainly related on the number of cakes that is been produced. Thus, the declined production of cakes has mainly increased the overall difference in actual and budgeted figure. Kaplan and Atkinson (2015) mentioned that companies to understand the difference in their budget and actual value incurred during the fiscal year mainly use variance analysis. Calculating over and under applied overhead of the year: Particulars Amount Budgeted Manufacturing overhead $ 194,521 Actual Manufacturing overhead $ 170,874.30 Over applied $ 23,646.70 The above-depicted table mainly states that the overall manufacturing overhead is over applied by $23,646.70. In this context, Tuominen (2012) stated that excess overhead applied during the production period is mainly known as over applied overhead, which is mainly derived by the company to derive effective budgets in future. Reference: Kaplan, R.S. and Atkinson, A.A., 2015.Advanced management accounting. PHI Learning. Tuominen, A., 2012. Activity-based costing in cost management: the impact of KONE PSR on sales overhead costs.