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Running Head: COST ACCOUNTING

Cost Accounting

Students Name

Institutions Name
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Cost Accounting

a) Primary accounting information needed by each manager

Jason Dennis is the Sales Manager, is responsible for supervising all the sales representatives.

The primary accounting information that a Sales Manager should know is the customer base for

the organization (Jiambalvo, 2010). Since the company is involved in the trading of tennis

related products, Jason Dennis would instruct his sales representatives to concentrate their efforts

on the people who play tennis for either recreational or for professional reasons. Besides, Jason

Denis would require the information of each of the products that they offer at the company. This

information includes the cost of each product. The Sales Manager do not just require the cost of a

product at the final stage but the cost from the manufacturing stage to the point where it is ready

to be sold. Being the Sales Manager, Jason Dennis is also supposed to be familiar with the salary

paid to each of his sales representatives (Gregoriou & Finch, 2012). Furthermore, he should

know the rate of commission that they are given on successful sales. This information is

important because it would enable the company to determine the number of profits made on

successful sales.

Dave Marley is Cost Accounting Manager and is responsible for supervising the cost

accounts. He would be required to know the cost associated with the each product that the

company manufactures. These costs fall into two categories (Gregoriou & Finch, 2012). The first

type is the period cost category while second is the product price category. Period costs comprise

mainly of the expenses incurred in the selling of the goods and the administrative costs while the

product costs include the manufacturing overhead cost, the cost of labor and the raw material

costs. Manufacturing overhead costs are costs which are related to indirect expenses such as

indirect labor and indirect cost of raw materials.


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Kevin Carson is the Production Supervisor. The Production Supervisor would need

information similar to that required by the cost accounting manager (Weygandt, Kieso &

Kimmel, 2012). There are only a few differences like information that the two should have. Such

a difference in the information required by the two would occur. For instance, the cost

accounting manager is required to know both the information on the period cost and the

production cost whereas the production need only know the cost of production.

Sally Renner, the Engineer, is responsible for the supervision of all new product teams. The

Engineer would require information on the target audience of all the new products (Weygandt,

Kieso & Kimmel, 2012). The Engineer is required to work in cooperation with the Sales

Manager so that she can understand whether the products manufactured by the company would

be loved by the target market which consists of the tennis players and the tennis game audience.

The Engineer should also be informed of the cost of the product in each newly created

design(Weygandt, Kieso & Kimmel, 2012). This is mainly due to the fact the product cost would

be necessary in the determination of the cost of selling the product. Besides, working with the

Sales Manager would enable the Engineer to get information on the amount that the target

market can pay to get the goods made by the company. The information would be crucial since it

would allow the Engineer to design a product whose price is within the range that the customers

are willing to pay.

b) Financial reports likely to be used by each manager

Since Tenrack manufactures tennis shoes, tennis clothes, tennis balls and other products

related to tennis, the production manager, cost accounting manager and the sales manager are

likely to use the balance sheet, manufactured goods costs schedule and the income statement
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(Wasson et al., 2011). However, the managers would not use the entire income statement, but

areas such as the inventory of the ending finished goods, manufactured goods costs and the

inventory on the beginning finished goods. These sections are relevant to the determination of

the cost of the products that are to be sold. There is crucial information to the Production

Manager, Cost Accounting Manager, and the Sales manager.

The cost of manufactured schedule indicates the costs involved. These values are indicated in

a breakdown manner in the process of the determination of costs of the manufactured goods.

Similarly, the managers would not focus on the entire balance sheet but selected areas. These

areas include the inventory of the raw materials, the work in progress section and the inventory

of finished goods (Wasson et al., 2011). Since the Engineer is concerned with the design and

development of the new product, she can use the three reports discussed above. This will help

her to make her contributions to the ideas of other managers. These are the main people who can

use the financial statements above. Other people especially those from the technical department

would have little use of the accounting reports above. This can be explained by the fact that they

deal with non-financial issues within the company.

c) Special purpose accounting report for each of the managers discussed above

The sales manager could be allocated the special purpose accounting document dubbed the

Sales Report of the Week.' The document is to be released at the ending of month or as deemed

fit depending on the level of customers served (Schroeder, Cathey & Clark, 2010). It can contain

the total of the sales made by an individual sales people in the just completed week and the total

sales of all the sales representatives combined. Furthermore, the document would contain the

objectives of each team of the sales representatives. The objectives could be divided into weekly,
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monthly, quarterly, semi-annually or annual goals. Another important component of the Weekly

Sales Report' would be the strategies which the sales representatives intend to use to achieve

their aims.

The cost accounting manager would be allocated a unique accounting report called the

Manufacturing Cost.' This could be the primary document with valuable information of varying

kind on the production of the tennis related productions. For instance, it could provide

information on the cost of manufacturing a product. The cost could be a given a broken down

manner (Schroeder et al., 2009). In other words, the cost involved could be broken into their

various components so that a concerned person would freely view the production stages singly

and see the one contributing the most cost. Since the cost accounting manager is the one in

charge of production, the document should separate the sections for each of the component and

product manufactured by Tenrack Company (Deegan, 2003). Furthermore, since the cost

accounting manager needs to understand the period and the production costs, this report should

detail the time costs and the production costs. The document could be given out when a

concerned period ends. This depends on the duration of the financial period of the company. It

might be monthly, quarterly, semi-annually or annually.

The production manager could be allocated the unique accounting report given the name

Cost of Production.' It would contain information which is almost similar to that in the

Manufacturing Cost.' However, it would not have the period costs since the production

supervisor does not need to know the information on the period costs but just the production

costs as discussed above (Kinyo, 2015). This special accounting report would be released when a

particular accounting period ends.


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The unique management accounting tool that the Engineer should be given is the Cost of

Design.' As suggested by the name, the report should have the costs that are considered in the

development of new products. This is also because the Engineer is the one who has been tasked

with the supervision of all the teams that are involved in the design of new products. Similar to

the Manufacturing Cost,' this document should include the period cost and the product costs. In

the same way with other documents, this report should be released when the accounting period

ends.
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References

Deegan, C. M. (2003). Environmental management accounting: an introduction and case studies

for Australia. Sydney: Institute of Chartered Accountants in Australia.

Gregoriou, G. N., & Finch, N. (2012). Best practices in management accounting. New York:

Palgrave Macmillan.

Jiambalvo, J. (2010). Managerial accounting. Hoboken, NJ: Wiley.

Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2010). Accounting: tools for business decision

makers. Hoboken, NJ: Wiley.

Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2010). Accounting: tools for business decision

makers. Hoboken, NJ: Wiley.

Kinyo, L. (2015, April 28). Financial Accounting Theory and Analysis. Retrieved April 16, 2017,

from https://hubpages.com/business/Financial-Accounting-Theory-and-Analysis

Schroeder, R. G., Schroeder, R. G., Clark, M., & Cathey, J. M. (2009). Accounting theory and

analysis: text and cases. Hoboken, NJ: John Wiley & Sons.

Schroeder, R. G., Cathey, J. M., & Clark, M. (2010). Financial accounting theory and analysis:

text and cases. Hoboken, NJ: Wiley.

Studies in managerial and financial accounting. (2009). Managerial Attitudes toward a

Stakeholder Prominence within a Southeast Asia Context Studies in Managerial and

Financial Accounting, Ii. doi:10.1108/s1479-3512(2009)0000019017

Wasson, D. D., Weygandt, J. J., Kieso, D. E., & Kimmel, P. D. (2011). Working papers to

accompany Financial accounting: tools for business decision making. Hoboken, NJ:

John Wiley.

Weygandt, J. J., Kieso, D. E., & Kimmel, P. D. (2012). Managerial accounting: tools for
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business decision making. Singapore: Wiley.