Management Accounting Assignment On Connectta

Question

Task:
Management Accounting Problem: Connectta Ltd manufactures furniture for computer work stations. Connectta uses a job costing system. The work in process inventory on 30 November consisted of the following jobs.

On 30 November, the company’s finished goods inventory consisted of four items.

At the end of November, the balance in Connectta’s materials inventory account, which includes both raw materials and purchased parts, was $668 000. Additions to and requisitions from the materials inventory during December included the following.

Connectta applies manufacturing overhead on the basis of machine hours. The company’s manufacturing overhead budget for the year totalled $4 500 000. The company planned to use 900 000 machine hours during this period, which is the firm’s estimated practical capacity. Through the first 11 months of the year, a total of 830 000 machine hours were used, and actual manufacturing overhead amounted to $4 140 000.

During December, machine hours and labour hours consisted of the following:

The jobs completed in December and the unit sales for that month are as follows:

Required:

1. Describe when it is appropriate for a company to use a job costing system.
2. Calculate the balance in Connectta’s work in process inventory account as at 31 December.
3. Calculate the cost of the chairs in Connectta’s finished goods inventory as at 31 December.
4. Actual manufacturing overhead incurred in December amounted to $252 000. Calculate Connectta’s overapplied or underapplied overhead for the year.
5. Explain two alternative accounting treatments for overapplied or underapplied overhead balances when using job costing system.
6. Explain how activity-based costing could overcome the deficiencies inherent in the existing costing system.

Task details: Students are to analyse the given information, make calculations where relevant and draw relevant, supported conclusions and make justified recommendations. Responses are to be formatted into a professional report for each part of each question, as would be expected of someone working in a modern accountant’s office. The report should include: title page, executive summary, table of contents, introduction, body, conclusion and reference list.

Answer

Introduction
There are different types of systems of costing that are performed by the organisations. These are beneficial for them in order to have proper conditions of working. These provide proper results of the different types of costing for the business. It can be analysed that due to the proper utilisation of the budgets, it becomes easy for the organisations to perform their work properly. This management accounting assignment will consist of different types of costing that helps the organisations in getting proper answers for their business so that these can be used to check the products that are left in the business for a specified period of time. These are beneficial for the organisations to have complete workings for the business. There will be presentation of different calculations in this management accounting assignment that will provide a clear view of the different types of costing for the organisation.

Describe when it is appropriate for a company to use job costing system
This is necessary for the organisations to select any kind of systems that are necessary for them to follow. This can be stated that the use of job costing systems can be applied where there are number of different jobs that are necessary to be performed so that the business calculates all the jobs in a proper manner in order to have complete view of the resources that are present in the business (Ibarrondo-Dávila et al., 2015). These gives proper utilisation of all the jobs and the jobs are performed in a proper structure that are beneficial for them. These are necessary for the organisations to perform in order to have proper calculation of assets.

Calculate the balance in Connectta’s work in progress inventory account as at 31st December

It has been checked that there are various activities that are performed by the organisations in order to have proper calculations within the business. It is necessary for them to have proper working conditions that affect the workings of the business. There is a necessity for the organisation to have proper structure in order to get the work in progress. This is a very significant factor that is necessary for the organisation to get all the corrections in a proper manner so that the management gets proper utilisation of the resources. These are beneficial for the organisations in order to have utilisation of the resources.

Calculate the cost of the chairs in Connectta’s finished goods inventory as at 31st December

Actual manufacturing overheads incurred in December amounted to $ 252000. Calculate Connectta’s over applied or under applied overheads for the year
The actual manufacturing overheads that are incurred by Connectta in the month of December is $ 252000. This is generally over applied overheads as the budgeted manufacturing overheads was $ 251000. This is a very interesting fact as the amount that was selected was less then the actual amount that happened. These are essential for the organisation to look after all the aspects and perform these activities properly in order to have good and quality products for the business. This is a necessity for the organisation to have proper calculations which do not waste the money. These are beneficial for the organisation as proper calculations give proper results which are mandatory in this section of the business. This can be checked from preparation of different types of costing that are necessary for the organisations to perform. These are beneficial for the organisations to get their works in a proper manner that is necessary for them.

Explain two alternative accounting treatments for over applied or under applied overhead balances when using job costing system
There are numbers of treatments that are present in the business so that the condition of the work gets modified. It is not necessary for the organisations to provide the exact amount for their costing. There are variances that are present in the workings that sometimes cause issues within the business. It is beneficial for the organisations to have good conditions to their work that helps the business to perform well in order to have good cultures in their work. These provide proper care for the business that is essential for them to perform. The treatments that can be done in relation to the over applied overhead balance is that it can be taken forward to the next year so that the overheads can be adjusted. This will help the organisation to carry over all the excess items so that those can be used in the next year as well. These will give proper workings for their business in order to have proper functioning of the business. The other condition of work that is present in the business is that these overheads can be adjusted in the same year with some other expenses so that there is no problem in the business to perform their work.

Similarly, the under applied overheads needs to be treated in the same way as the over applied overheads were performed. These are also treated in the same way. These are beneficial for the organisations as these are such items that fill up the organisational structure of the business. It is necessary for the organisation to adjustments of the under applied overheads of the business. These can be done by adjusting the item in the present year or these can also be adjusted in the next year. But it is necessary for the under applied overheads to be reduced as fast as the organisation can as these affect the organisation on the calculation of income and expense. These are beneficial for the organisation to perform all the calculations properly in order to have the exact results and outcomes.

Explain how activity based costing could overcome the deficiencies inherent in the existing costing system
Activity Based Costing is such tool that is used by the management accountants that helps the organisations to add all the activities that are incurred in the course of the whole process. The activities those are included from the production to the selling are added so that the outcome that is received is exact and there is no problem within the business. There are different methods that are used by the organisations that tend to satisfy the needs of the people. The organisations need proper costing method that can be applied in the business so that they get proper results from the business (Alsharari et al., 2017). It has been analysed in this management accounting assignment that the use of different types of costing gives different issues. These issues need to be solved in such a manner that brings in proper conditions to their work. These are beneficial for the business so that the workings are solved and the performance is improved in order to have good workings for them. These are beneficial for the business to use activity based costing as a proper method in order to have proper control over their inventories.

There are various activities that are present within the business so that they get good working conditions for their business. These are beneficial for the organisations so that proper conditions are applied within the business and the workings are done in a proper way. These give good results in the working of the business so that the conditions of the works are maintained in a proper manner. These are necessary for the business to perform in a proper way that provides proper responds to the business. A number of items can be changed by using proper methods in the business that applies to proper working conditions.

Conclusion
There are lots of calculations that are performed by the organisations in order to have proper conditions of working. These bring out the changes within the business in order to use the best fitted condition so that the workings are done in a proper manner. It is observed in this management accounting assignment that the quality of work also changes with the application of proper tool for costing. These are important for the organisation in order to have good working condition that will give good result for the business. There are various factors that are present within the business that acts as a determining factor as to which type is to be used. It is recommended in this management accounting assignment that this type should be used for a specified period of time and cannot be stopped at the middle. These are beneficial for the organisations in order to have proper workings for the business making the work proper and secured to be used by the organisations. Management accounting assignments are being prepared by our accounting assignment help online experts from top universities which let us to provide you a reliable assignment help online service.

Reference List
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Ibarrondo-Dávila, M. P., López-Alonso, M., & Rubio-Gámez, M. C. (2015). Managerial accounting for safety management. The case of a Spanish construction company. Safety science, 79, 116-125.

Johnstone, L. (2018). Theorising and modelling social control in environmental management accounting research. Social and Environmental Accountability Journal, 38(1), 30-48.

Mirzaey, M., Jamshidi, M. B., & Hojatpour, Y. (2017). Applications of artificial neural networks in information system of management accounting. International Journal of Mechatronics, Electrical and Computer Technology, 7, 3523-3530.

Schaltegger, S., Etxeberria, I. Á., & Ortas, E. (2017). Innovating corporate accounting and reporting for sustainability–attributes and challenges. Sustainable Development, 25(2), 113-122