Management Accounting Assignment Example | Topics and Well Written Essays - 1750 words

Management Accounting - Assignment ExampleThe cultivation is used to analyse the influence of the bon tons undertakings on key accounts such as cost and profits. Therefore, it is fair to mention that the cost systems drive decision-making by providing critical information suitable for operation analysis. The common types of costing systems are the activity base costing and the absorption costing system. The paper go away provide a profit and loss recital prepared using both the ABC and absorption costing system. In addition, a discussion will be included to explain to Riptide Plcs manager that the ABC system provides extra information suitable for decision-making.Let us determine the absorption invest for the two departments (machine and assembly department). The absorption rate for machine department = ( hit allocated to machine department/ machine hours) = (504,000/420,000) = $ 1.2/ machine hour. Therefore, the overhead cost per product is as below.The absorption rate for th e assembly department = (overhead allocated to assembly department/ direct labour hours) = (437,000/530,000) = $ 0.8245/ labour hour. Therefore, the overhead cost per product is below.Profit statements have been prepared using the ABC system and the absorption costing system. In the process of making the profit statements, the costs incurred by Riptide plc when producing the three products have in any case been identified based on the two costing systems. Based circuit card F below, the cost per unit of measurement under the ABC system for product XYI, YZT and ABW are 39.25, 92.025 and 73.583. Under absorption costing, product XYI and YTZ cost more than than the same products costs under the ABC system. However, product ABW cost more under the ABC than it costs under absorption system. Therefore, the differences in the cost of the products under the two costing systems are summarized in Table F below.Based on Table G below,