HI5017 Managerial Accounting


The objective of the report focuses on the identification of various kinds of cost methodologies which can be used by organisations. The report mainly discusses the cost methodology called Job costing and gathering information about the methodology being used in the organisation. Job costing methodology will be identified with features and appropriateness in the report in Australia. The report will help in the understanding of various strategic decisions of cost information for the managers and also help in the implementation of Job costing. The second half of the report discusses the article analysis as the information in the article will provide the process for the use of Job costing for the real-life organisation procedures. The comparison of the contemporary organisation which is using Job costing is being included in the report along with the conclusion of the article analysis.

Part A

Job costing features

Cost category: this is the costing system where there are two main categories for cost such as fixed and variable cost. The strategic decisions are made by using this categorization of costing as managers need to provide a framework and collect information.

Cost allocation: the allocation feature is the most important factor in Job costing methodology. Cost drivers decide the cost allocation in job costing. As per the rule, the cost is considered as work in progress until the products are completed and at once this is completed, the cost is transferred to cost of goods sold (Zahller, 2017). Cost units have cost drivers for each unit which are related to the activities and indirect production. For instance, the units of machine produced are based on the cost division of machinery. Whereas on the other side, the direct cost depends on the salesman’s covered distance for the transportation of the machinery.

Complexity: organisations can face various complexities in the implementation of the costing system because of the requirement of cost drivers for every unit of cost. The cost drivers are the ones on which the accuracy of the system is dependent. The job costing expert is required for getting accuracy in the allocation of cost and tracks the cost systems. Service-based organisation are mostly benefitted from this Job costing system because of the charging policy in these organisation is based on individual crises basis (Argade, 2020). The cost allocation will become complex in the organisation for the management accounting system during the time of job system implementation as it deals in exquisite numbers of management.

Implementation high costing: Costing of the implementation is directly dependent upon the complexity in implementation of a system. The experts are required to handle the new system of costing which increase its costs. The traditional costing system is less expensive in comparison with the new system of cost as it requires higher human resources and time on allocation on the higher range.
Appropriate Australian corporation organisations
The service-based industry can have the implementation of the job costing as this costing methodology is very appropriate for the industry according to the features of the methodology. The mass allocation can be done in the service-based industry as the customers are varied from the expenses in the other industries. For instance, there is variation in the requirements of the customers according to the kinds of plans they are being provided and there is also variation in the cost of the plans for the customers which are calculated on the selling price (Drobyazko, et. al., 2019). If the prices of the products are increased then the demand for the product will decrease over time as the customers will be willing to pay for the extra services and quality products which are being provided by the organisation. The organisations which are more suitable for job costing in Australia are as follows.
Westpac Corporation
Westpac is an Australian based banking and financial industry. This organisation is suitable to use the Job costing method in serving customers with products and services. The job costing method will be the most accurate and relevant in this industry. The cost drivers will serve the customers of banking and finance (Argade, 2020).
Park Hyatt Sydney
Park Hyatt Sydney is a company industry of Australia. The cost operation services are being provided for the customers of this industry. The job costing system is appropriate for this industry as each activity is costs differ according to the services being provided for the customers. The mass allocation expenses can be used in the serving of customers according to the facilities they are being provided on the job costing.
Decision making through costing
The decision-making process is the most important process for any organisation as the progress depends on decision making. The managers need to ensure the accuracy and relevance of Job costing in the organisation. The accuracy is dependent on the management of the organisation to use the costing process in the favour of the organisation. Job costing is more accurate in finding costing information for the organisation in comparison with the traditional ways of cost.
The job costing is not able to improve the framework of accounting of organisation but it can enhance the management process of the organisation. The organisation needs to maintain the balance between the deployment of the resources in the financial matters and management matters of the company (Prabowo, 2019). The efficiency of the policies being used in the management accounting for the cost estimation and selling prices of the products is dependent. This costing method is helped in the quality of management for the allocation of the cost in an indirect manner for the detailed manner of the organisation. The costing method is very important for the organisation.


Designing and Implementation of the Costing system

The chosen article concentrates on the execution of the job costing in the Hidesign fashion store. It is a small scale store which regulates in Australia. In current time, the company is using the traditional method of costing and investigation is based on the scenario which has offered a framework with the assistance of job costing that can be executed effectively. The main concentrate of this report is to analyze the issues which are related to the traditional costing techniques, execution of job costing to eliminating the described problems and work on improving management efficiency (Kelly, et. al., 2017). As per the given article, it has been analyzed that each member of the team has to perform their defined role and focus on designing the costing method.
The major focus of the study was to select new costing methods which will assist in eliminating the issues which arise in the company. In the described scenario, the project mainly identifies different benefits which are related to the job costing and it helps in maintaining efficiency as per the current condition of the administration policies and systems. As per the view of the article author, job costing is simple and quick to develop. Apart from this, the relevancy level of cost prediction allocating in this tool which is higher as compared to the traditional method that is recently adopted or used by the respective company (Pollard, 2018). Along with this, the cost-driven can be formulated for particular characteristics of orders, suppliers, procedures and many more that can assist in developing an appropriate framework of MA policies in a better manner. The article helps in identify the effective accounting area of research within the domain and it helps in examining the relationship between control and creativity inherent.
The research mainly focus is discussed in this scenario and it helps in developing a time-driven job costing framework for the company that was properly developed, cost drivers. For the effective formulation of cost drivers, this study has recognized the provided room details that are related to various services that are given. The quality, size and types of room available in the company that are concentrate on identifying rental fees of an organization. In addition to this, other required data and information also described such as HR activities, room inventories, overhead costs, fixed assets and so more that were identified by a researcher at the time of developing specific framework.
Based on the above information and data in the scenario, it has been analyzed that execution and designing of job costing can be a difficult procedure for business concern. The job costing complexities enhancing for the company that are regulating in the service sector but whole accuracy to form the data that will; advantageous for long term success and growth level of an organization (Laing, et. al., 2018).

The Satisfactory Features Discussed in Part 1

Features that are described in Part 1 are as follows:
Category of cost – As per this feature, it is required in job costing to distribute the entire cost operations in two main categories that include variable cost and fixed cost. This department assists in effectively allocating important cost. Along with this, the researcher has divided the total cost of operation into fixed and variable costs in a better manner. The main focus of this research was to formulate the framework that helps in managing the variable cost of operations such as direct labor, direct material and overhead expenses (Bariska, et. al., 2019). The researcher also conducts calculation regarding such expenses that are developed and it provides details of different rooms that are accessible in the company. The below table is discussed the extract from the research project that can assist in evaluating and understanding the technique which helps in complete the calculation:

The variable cost of the business operation had been calculated for each category of facilities that are offered to the customers.
Allocation of Cost
As per this feature, the whole allocation of indirect value is mainly based on the cost drivers. It is the most important characteristics of Job costing method which can assist them in developing relevant and accurate framework related to the cost allocation in a better manner. As per the details and information which is provided in this study, the primary concentrate of the researcher is to develop an effective framework for the Job costing technique for the company so that they recognized the cist components (Dăneci-Pătrău, et. al., 2017). The main reason behind this is that data of different forms is essential in the firm that includes details of rooms, overhead cost and so more that were gathered by researchers of the project.

From the basis of this feature, the execution procedure of Job costing can be difficult due to the recognition of various forms of cost drivers. It can be analyzed that the gathering of information to formulate the cost drivers is complex in each manner. Different data has been collected in context top various forms of facilities which are provided to consumers of the company. The data collection method is complex as it is not required that management had already gathered these type of data that are related to the internal reports (Ribeiro, et. al., 2016). Besides this, such form of information is not easily available in the financial statement reports and this was developed by an organization. For instance, data like fixed assets and size positioned in each room that was not accessible in the financial reports.

The High Cost of Implementation
According to the complexity of the feature, a specific costing system is directly proportional to implementation to the cost of the company. On the other hand, the research project has not given any data and information associated with the total cost which may incur by the company to execute the job costing system (Ayach, et. al., 2019). It is a general sense that gathers effective data from internal sources of form and it will need additional cost that will increase risk factors for the traditional method.

Useful of Cost Information to the Internal Users

Different forms of accounting are undertaken by the business operations such as management and financial accounting. Most of the organization focuses on financial accounting rather than management accounting. The company requires making sure that they should adopt accurate resources in every accounting division. The major significance of MA helps enhance while an organization competing with the cost. Along with this, such factor will assist the company in reaching competitive benefits in the sector which is cost-efficiency. Due to the increment of the organization in this specific sector, every company desires to analyze such factors that may provide them with higher competitive advantages for increasing growth level in the large market place (Charles, et. al., 2019).
The management accounting and cost information assist a company in understanding the common structure of the firm are that they are using accurate pricing strategy. The information is mainly concern and focuses on MA which is used by internal stakeholders and this is not published in the general domain for external stakeholders. The research mainly concentrates to recognize, designing and implementing the job costing framework that can help businesses. The researcher of this article has gathered important internal data that are accessible in the context of various types of facilities offered to customers. Based on process designing, this is analyzed that managers of the company will capable to develop an essential decision regarding rates that are collected from clients (Mackey, et. al., 2019).
Along with this, the data will be beneficial for fulfill investors’ needs and wants which is the main duty of the CEO and another senior member of the company. The main goal of executing the job technique is to eliminating cost appreciation by replacing tradition costing system with such specific method. This has been examined that a new costing system will assist in achieving production efficiency and implement best suitable pricing strategy.

Two Key Lessons that would inform Contemporary organization

The contemporary company can refer as a company which is regulating at the independent level. There are various divisions in the company that are operating functions and operations based on independent. Also, the management provides decision making power to the departments where they can take an accurate decision as per the welfare of the firm. The entire structure of the contemporary company is compared with a multinational organization that is controlled effectively.
In this report, a small scale company regulating in Australia which named a Hidesign fashion store that has studied and the job costing method has been developed for the company. This will help in recording the cost of manufacturing jobs rather than procedures. With the help of using job costing, the project manager can keep track of the cost of each activity and managing the data that is relevant to the business operations (ElGammal, et. al., 2016). As per the researcher, the overall benefits of implementing a job costing in the company helps in increasing relevancy in job activities and departments of the company .

1. The constant overall analysis of business procedure to make improvement
The company requires altering business operations under the changing different setting. The whole business surrounding is increasingly dynamic and competitive. The small scale business that is not managed the external or internal environment of an organization that will become obsolete. This is the main reason that the Hidesign fashion store has reevaluated their costing system. The traditional method of costing is outdated and it may able to offer relevant data related to the cost. Besides this, different decisions are taken by the company and it is based on management accounting. It is the major reason that a new system is proposed to be introduced infirm. The contemporary company is necessary to analyze and evaluate their business operations concern the cost so that they are improving over the period.

2. Hiring experts
This is recommended that researcher need to focus on job costing method which helps in tracking and analyzing the current status of the cost of an organization. The contemporary company is using a traditional method that should appoint experts that manage the designing and execution of job costing (Mackey, et. al., 2019).
The report discusses the job costing methodology for the organisations to use for providing various services and products of the organisation. The job costing methodology’s features are being concluded in the report which is being carried with the various outcomes of the organisation after the implementation of the costing methodologies. The report also concludes the various organisations of Australia which are appropriate for using job costing methodology against the traditional costing methodology being used in the organisation. The report also concludes the analysis of the article for the use of job costing methodology in the various organisations to provide services and products to the customers in an enhanced way.


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