Académique Documents
Professionnel Documents
Culture Documents
Cost Accounting
Students Name
Institutions Name
COST ACCOUNTING
2
Cost Accounting
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
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
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
COST ACCOUNTING
4
(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
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
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,
COST ACCOUNTING
5
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
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
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.
COST ACCOUNTING
7
References
Gregoriou, G. N., & Finch, N. (2012). Best practices in management accounting. New York:
Palgrave Macmillan.
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2010). Accounting: tools for business decision
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2010). Accounting: tools for business decision
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:
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
COST ACCOUNTING
8