Managerial accounting is the study of financial information which brings a huge impact on decision-making. During this course, students learn the practice of analysing, identifying, measuring, communicating and interpreting the financial information to upper-level management. If you are a student at European International University, France, then you might be asked to write a report as a part of your MGT510 managerial accounting assignment.
In this blog, our managerial accounting assignment writers have provided the entire information about the MGT510 Managerial Accounting Report writing task. It includes the case scenario, purpose of assessment, requirements, and the approach of writing the MGT510 Managerial Accounting Report assessment.
Your report should be based on the given scenario where you are required to develop a profit statement for Swipe 50 Limited company for the months, February and March. As per our managerial accounting assignment writing experts, you need to be familiar with the concepts, absorption and variable costing. Absorption costing is comprised of costs such as production and all other fixed costs, whereas variable costing includes only those costs that are directly related to production.
Given below in the managerial accounting assignment sample, you’ll see the snapshot of the case scenario of Swipes 50 limited.
In the above case study, you need to prepare a profit and loss statement for the company and compare the profit calculated through absorption costing to that of variable costing. Moreover, you also have to describe how variable costing and absorption costing is different from other methods along with the importance of both of them. You are also required to explain the three different ways that can improve the accounting systems for Swipes 50 Limited.
Here’s How an Expert Prepares the MGT510 Management Accounting Report!
While many students have found writing the report a little too challenging, our experts will show you the right approach to completing this MGT510 managerial accounting assignment task.
Start the Introduction
Generally, writing an introduction to a report includes purpose, background, investigation methods, scope, etc. The MGT510 Managerial Accounting report assessment thus shall include the definition of managerial accounting, tools or methods used, a comparison of absorption and marginal costing, and the three ways through which Swipe 50 ltd. can strengthen their managerial accounting.
Preparation of profit statement
Absorption costing: It is also called full costing that entails distributing fixed costs incurred while production and can be categorised into two different heads namely, cost of goods sold and attributable to inventory.
Here’s an example of the simplified view of production at Swipe 50 Ltd.:
Variable or Marginal Cost: Marginal costing is the one that keeps on changing as the number of services or goods of business changes. This method enables an organisation to run a cost-volume-profit analysis.
Let’s take an example of marginal cost in relation to Swipe 50 Ltd. Here, you are required to prepare a profit and loss statement for the company. The basic formulas that you can use in your assignments are as follows:
Absorption cost formula = Direct labor cost per unit + Direct material cost per unit + Variable manufacturing overhead cost per unit + Fixed manufacturing overhead per unit.
Absorption cost formula = (Direct labor cost + Direct material cost + Variable manufacturing overhead cost + Fixed manufacturing overhead) / No. of units produced.
Total Variable Cost Formula = Total quantity of output x Variable cost per unit of output.
Reconcile the profit calculated using absorption costing to that using variable costing
We already know that when the total production is higher than sales, then the operating income will also be greater in absorption costing over variable cost. Now, you must provide a statement in order to reconcile profits under absorption and marginal costing. Here’s a diagram that will help you in preparing it:
Analysis and Interpretation
In the above table, you will come to observe that the managerial accounting techniques use different costing methods to calculate the product unit cost. Also, you will notice that the difference in operating income is because of the difference in inventory valuation and closing stock.
Do observe that the operating profit through the absorption cost method is €1,82,750.00 and €1,99,658.75 in February and March, respectively. Whereas, via the marginal costing method, the profit amounts to €1,72,025.00 and €1,91,830.00. Did you see the difference?
Therefore, the experts who provide managerial accounting assignment help say that full costing is an ideal method as compared to variable costing because it produces a high percentage of profit.
Explain how one method differs from the other?
To differentiate between absorption and marginal costing methods, you must explain a few points of difference such as the nature of overheads, profit calculation, determines, and closing and opening stock. The importance of these costing techniques should be explained separately so that the readers can understand it easily.
If you need any type of help in preparing the MGT510 managerial accounting reports, then do contact the managerial accounting experts here!
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