Task 2- Learning outcome 2

In order to assess your ability and readiness as a management accountant you have been asked by your line manager to make a supported document in order to demonstrate your understanding and ability to identify and calculate different types of costs using different management accounting techniques and methods. During the exam you need to show your ability to:

Use the following data which have been provided by the company On December , 2020 to help it identifying some financial information regarding its manufacturing operations. In order to do so you have to:

A)Apply a range Management accounting techniques including:

1)Methods of pricing decisions (Absorption Cost Method & marginal Cost Method)

2)Contribution Margin calculation.

3)Break-Even Analysis.

4)Target Profit Analysis

5)The Margin of Safety

B)Calculate costs using appropriate techniques of cost analysis. (Absorption & marginal)

C)Produce financial reports (marginal income statement and absorption income statement)

D)Interpret the use and data presented in both statements.

Account Balance Direct material per unit 9 Direct Labour per unit 7 Variable Manufacturing Overheads 4 Variable Administrative and Selling expenses Fixed Manufacturing Overheads 50.000 Fixed Administrative and Selling 30.000 expenses Number of units 100,000 Expected (Budgeted Sales) 20.000 Target profit 400,000