Management Accounting Case Study

Management Accounting Case Study institutionThis is a report of guidance business relationship will focus to a greater extent on speak to and budget. According to reports, the issue of cost method, information analysis, computation, possibility and applications of gold companies that contribute help readers may clear understanding of this topic. The trouble in making the cost of the largest organizations will excessively be mentioned in the report.Moreover, there argon many pillowcases of information expected be for the succeeding(prenominal) year and analyze the information that can make the reader mulish experience in accounting environment.I. Identify and classify the different types of be incurred in Wine fraternity1. Cost salmagundiThe cost classification is divided into three categories called cost classification for stock valuation and profit measurement, cost classification for decision making and classification for the control. According Vang Company, they cas t off adopted the classification of expenses for stock valuation and profit measurement that can help them make the kind of cost-effective and likewise predict risk of infection or revenue for their future. There have cost that are endow in all organizations can help accountants can easily enumerate the cost of an organization. Accordingly, the cost will be divided into compute stuff and nonsense be, take in labor cost and submit cost for each equivalent indirect. Moreover, the cost also refers to a number of other be such as politics overhead, high on S D, output be and time costs. ( Case Study )1.1 guide on costsDirect costs means costs that are directly attributable to production of a product or service provider. A direct costs allow direct material costs, direct labor costs and other direct costs ( financial accounting and management financial statements, p6, 2010 ) .The first is the direct material costs. Direct material costs are the direct costs of material s used to make and sell products or provide services ( financial accounting and management financial statements, p7, 2010 ). At Vang Company, because this is a keep attach to specializing in producing custom t-shirts for corporate events, family and group, they should have sufficient material to produce t-shirts as fabric, sewing. So to have the documents, the company needs to even out for the provider.Next is the direct labor costs. Direct labor costs are the specific costs of employees or practiseers directly used in the production of goods and services ( Ukessays, 2014 ). Direct labor costs include salaries, allowance, allowances and deductions from wages as social insurance, health insurance. According to the law of Vietnam, workers minimum wage is 1,150,000 VND / month. At Vang Company, has 25 employees, including 21 in production and 4 in management and sales ( Vang Company Case Study, 2014 ). So Vang Company must pay their employees at least 1,150,000 VND / month and ca n pay more(prenominal) depending on the job train ( Wikipedia, 2013 ) .Direct expenses are part of the direct costs that are washed-out in making a product or providing a special(a) service, or run a department ( financial accounting and management financial statements, p7, 2010 ). To ensure the prime(prenominal) of T shirts, Vang Company using galvanising sewing machine to sew and hand silk screen printed. Using the thingummy s power costs incurred to produce T -shirts ( case studies vang Company, 2014 ). They are tools to be purchased or leased by Vang Corporation to make T -shirts .1.2 verifying costs Indirect costs or overhead costs include indirect costs that material, indirect salary costs, indirect costs, administration costs, S D costs .Indirect materials related to to products, but non derived from the finished product. That the documents without material used as direct but it also helps to finished product. For example A number of indirect materials in their fuddle companies are sewing machines, chemicals for cleaning cloth or machine, scissors, gloves protect workers when they work or some tools that can help to determine product .Indirect salary costs for wages that but it is not related to the production process and to not participate in the product. For example Vang Company also need to pay for the management, monitoring and help them search activities and enterprises but they do not work on the product line. The security and cleaner for Vang company also not working on product activity so that Vang company also have indirect wages for them.Indirect costs which are not charged directly to production ( management accounting and financial statements, 2010). Vang companies also pay insurance for employees, their production and also pay rent for the old buildings that they rent for offices and factories .The administration costs that the costs related to the management and operation of the company ( SmallBusiness, 2014 ). For example, Vang Company will pay the wages office concluded wages of secretaries, accountants and also they have to pay rent, rates, insurance, light, sanitation, telephone, portal, hope charges, legal costs .The S D costs, including marketing materials, advertising, packaging, salary and mission sales staff, rent, rate, insurance, cost of product deliveryVang company. They also transpose the quality and packaging of individual products are wrapped in recycled brown newspaper bag1.3 mulish cost, step cost, variable cost and semi-variable costsFixed cost is a cost which remains constant within a certain level of output or sales is unaffected by changes in the level of activity (Finance management accounting and financial reporting, p11, 2010). think 1 Graph of immovable cost (Google, no date)In Vang Company, the fixed cost could be salary of employees, the rent of factory building and equipment. However, in Vang company case study, fixed factory cost changed from 2006 to 2008. It sum up d from 20,000$ to 30,000$ in 3 years. This proves that the economy is not stable.Step cost is fixed cost when paying company but costs have risen because of the add-on of production volume or something it might be reduce because of reduced production volumes. The cost steps can occur due to the companys expansion. For example For Vang company if they received more T-shirt from customers that they will make more t-shirts, and they need to have more staff will make them increase the cost or they need to hire to plant because the increase of the laborers. variable quantity cost is a cost of labor or material change with activity level (Rosemary Peavler, 2014). In Vang Company, variable costs include knifelike materials, packaging, and labor directly involved in the production process of the company. variant cost plants raised from $ 70,000 to $ 120,000 in 3 years from 2006 to 2008 (Case Vang Company, 2014).Figure 3 Graph of variable cost (Google, no date)Semi-variable cost are the c osts that contain fixed cost and variable cost components. For example Vang company also need to pay salary (fixed cost) and commission (variable cost) for salesperson and its a semi-variable cost.Figure 5 Semi-variable cost (google)