Information provided by the management accounting

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Information provided by the management accounting function of an organisation needs to be complete, relevant, timely and accurate. As such, the information system used has to gather the required data has to set up correctly so that any information produced and then used for decision- making purposes is both complete and accurate Data processing in a costing system goes through several stages, including data collection, input, processing, output and storage. Policies and procedures should be implemented which ensure that the risks inherent in each of these stages are adequately addressed by the application of various internal control activities. Policies and procedures implemented should also allow for the operation of key general controls across the organisation. These controls relate to the overall environment in which the costing system operates. Examples include: Segregation of duties - involves the separating of employee duties and responsibilities so that an individual employee cannot engage in fraudulent activity without being detected 4. User risk awareness - organisations need to ensure that the users of the costing system are aware of security threats & risks and that the organisation’s policies are followed. 5. Data storage (backup) procedures & policies - data is one of an organisation’s most valuable resources. Policies relating to the access (restrict access), duplication, sending and storage (offsite backup critical) of data should be implemented. And finally Cost behavior patterns refer to how business and operating expenses change or remain stable through different events. Patterns can change especially during varying production levels or sales volume within the company. Cost behavior patterns occur in fixed, variable and mixed expenses Examples of fixed costs are rent, insurance, and loan payments. Some others are property taxes, depreciation on equipment Task 2 a) Conversion cost= Direct labour+Fixed Manufacturing overhead+variable manufacturing overhead Conversion Cost= 80.000+60.000+30.000 Conversion Cost= $170.000 b) Product Cost= Variable Manufacturing+Fixed Manufacturing Overhead Product Cost= 250.000+60.000 Product Cost= $310.000
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c) Prime Cost=Variable Manufacturing-Variable Manufacturing Overhead Prime Cost= 250.000-30.000 Prime Cost= $220.000 d) Period Cost= e) Expected Manufacturing Overhead for a production of 60.000 units= Variable Manufacturing Overhead Rate= Variable Manufacturing Overhead/Budgeted leve lof Activity Variable Manufacturing Overhead Rate= 30.000/50.000 units Variable Manufacturing Overhead Rate= $0,6 per unit Variable Manufactoring Overhead for 60.000 units= 0,6 x 60.000 Variable Manufacturing Overhead= $36.000 Expected Manufacturing Overhead= Fixed Manufacturing Overhead+Variable Manufacturing Overhead Expected Manufacturing Overhead= 60.000+36.000 Expected Manufacturing Overhead cost for 60.000 units= $96.000
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4.2 Case Study Task 1 Planning and gathering information to create a Budget We wil need to know What are the activities or programs that will do the most to advance your cause and mission, and that you think you can carry out with the income and resources you know or you have?
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