Accounting for Managers Advanced Computer Technology

Question: Describe about the Accounting for Managers for Advanced Computer Technology. Answer: Problem 1: i) Depicting the faster process that might be used to increase competitive edge of the company: The faster process could only be applied by using advanced computer technology in the engineering and administrative department of the company, In addition, the use of computers has mainly reduced the overall time gap, which mainly occurred by transferring the data from one operations to other. Furthermore, the implementation of advance machines might also help in reducing thy overall time of completion of finished goods and decrease the process time. Davenport (2013) stated that advancement in technology has mainly help companies automated their operations, which in turn has reduced the completion time and cost of production. The reduced process time in engineering might mainly help the company to produce more goods, which in turn could help in increasing the supply and reduce cost of production. Moreover, the implementation of new technology could not only reduce process time but also help companies to reduce the labour costs incurred in their production process. In addition, the use of technological boost in administrative areas could effectively help the company to make adequate investment decisions and calculate the overall costs, which might be incurred in near future (Kieling, Brei and Vieira 2016). ii) Depicting the reasons for implementing improved quality for companies having reduced process time: The company that is able to work faster and reduce its process time mainly loses its focus on quality, which in turn might affect the overall customer satisfaction. In addition, a faster processing company could only focus on time and ignore the quality that is been produced. Schonsleben (2016) stated that customers are mainly focused on quality and ignores products that have low quality, which in turn affects profitability of faster processing companies. In addition, the implementation of increased quality might help faster processing companies to improve their overall product quality, which in turn might help in raise their customer base. In addition, the improved quality with faster process could help the company to raise its production quality and produce goods in faster rate. In this context, Yao et al. (2012) stated that companies that have reduced process time mainly ignore the quality checks, which mainly help in detecting faulty products. On the other hand, Wiles and Watts (2014) criticises that increased inspection conducted in the manufacturing process mainly reduce the ability of the company to reduce their completion time. In addition, companies could effectively reduce its process time by implementing advanced technology, which is not possible in case of improving their quality. iii) Depicting the problems that might be raised from increased speed process: The potential problems that might arise from increased speed of process are depicted as follows. Low quality and no improvement in products: The main problem that the high-speed process has is that it is not able to maintain the quality of the finished products. In addition, the company is not able to implement any kind of changes to their products as demand by the customers. Furthermore, any changes in the product design might mainly reduce the overall speed of the process and hamper completion time of the finished goods (Al-Mansour et al. 2014). Focused on process and not in customers: In addition, the other problems that might be faced by speedy process are that it is more productivity centric and not customer centric. The demands of the co customers are neglected and only reduction in production time is focused. Beesley (2013) cited that companies that are mainly production centric are not able to increase their demand, which in turn reduces their overall profitability. The depiction of these problems might mainly help in understanding the need of quality in the manufacturing process. Moreover, the company could find an equilibrium with production and quality to reduce the cost and maintain the level of demand in the market. Problem 2: i) Commenting on the overall observations of the case: The observation that been conducted by Steve Smith is mainly based on the overall income and the inventory balance of the two branches. However, the observation is mainly one sided as Steve Smith only looks in to the overall net profits that is been generated by both the branch. Moreover, he did not see the overall reduction in inventory that is been achieved by Adelaide, which might be conducted due to the implementation of absorption costing. In addition, the observation does not consider the overall impact of absorption costing, which might be affect operations of the both the branch (Chen, Kok and Tong 2013). ii) Depicting the conflicts that might be created if the company decides the business based on net profits: The company mainly provides bonuses based on net profits generated by the both the branches. However, this method might raise some conflicts as it mainly ignores the additional inventory accumulated and reduced by both the branches. In addition, the company also neglects the fact that implementation of absorption costing could have positively or negatively affected the overall profitability of the company. Moreover, XYZ policy could mainly reduce the efficiency of the managers in reducing the inventory and focus on sales. The negligence of efficiency and management control might mainly reduce the overall employee retention of both the branches. Rex and Outterson (2016) mentioned that bonuses are mainly conducted on basis of profits, employee loyalty and efficiency of the managers in conducting their operations. Moreover, increased conflicts among managers might reduce the overall productivity of the company. Problem 3: i) Depicting the variance significance regarding production cost for the period: The company has both material and labour variance present in its operations, which mainly affects its overall cost. In addition, the material variance is mainly conducted to identify the overall difference between actual cost of direct materials and standard cost of market. Moreover, the company to identify the low or high number of quantities consumed in its activities mainly uses the material variance. In addition, with the help of material variance companies are able to detect the actual cost inputted through their manufacturing process. Moreover, the labour variance is mainly conducted to identify the difference in actual and standard rate used by the company to portray their actual labour cost. Furthermore, the favourable material variance mainly indicates that budgeted material is equal to the actual material used by the company (Hee et al. 2014). In addition, the material variance is favourable, which depicted that the material used by the company is same and does not have to incur any additional material cost. Moreover, the labour variance is negative, which only indicates that the company is not able to depict the actual wage rate, which in turn has mainly increased the overall cost of production. ii) Stating the further information needed by the management for analysing the production cost for the period: In addition, the company could effectively find relative information like adequate material usage and cost of labour from the variance analysis. Furthermore, with the help of variance analysis the company could effectively detect the favourable and unfavourable variance that might improve their overall future budget. Moreover, the company with the help of the production cost analysis are able to detect the adequate amount of material and labour hours that might be used to support their production needs. In addition, the variance analysis could effectively help in depicting the changes in standard rates, which could help in depicting the adequate costs in their accounting books (Memon et al. 2013). Moreover, the analysis of variance and production cost could effectively help the company prepare an effectively budget, which might help in supporting the future activities. Problem 4: i) Calculating the cost per unit for variable cost: Variable expenses Budget A Budget B Direct materials 260,000 360,000 Direct labour 40,000 60,000 Variable overhead 60,000 75,000 Variable selling and administrative expense 60,000 60,000 Total variable expenses 420,000 555,000 Total units sales 20,000 30,000 Variable cost per unit 21 18.5 ii) Depicting the reason for budget A has high cost and low sales forecasts: The lower and middle level management mainly conducts budget A, which is why it mainly focus on the costs incurred by the company. In addition, as budget A is conducted by low level managed it is not able to effectively depict the change in demand for the companys products. Furthermore, as the low level management are not provided with relative information regarding the increase in demand, which in turn resulted in high cost and low sales forecast in the budget (Einsele 2013). In addition, Budget A is mainly cost centric and depicts the adequate cost, which might be needed by the company to continue its operations. iii) Depicting the reasons for budget B has low costs and high sales forecasts: The senior management has mainly conducted the overall Budget B, which is more focused on depicting the increase in demand for the products of the company. This budgeting system mainly focuses on depicting the rise in future demand of products and does not effectively addresses the change in variable and fixed costs of the company. Moreover, the senior management are mainly keen on detecting the change in demand, which can be effectively seen in Budget B. In addition, the top down budgeting approach mainly help companies to build the required allocation for each department. Moreover, this approach also helps in reducing the wastage of resource allocation that might be conducted in the budgeting process. In addition, the top-level management with adequate research and survey are able to depict the adequate budget requirements and income that could be generated in near future (Le et al. 2014). Moreover, the top down approach mainly reduces the dysfunctional behaviour, which might be conducted by the company. iv) Depicting the ways in which participants could come to a consensus to the budget and depicting the advantage of this approach: Both the group could effectively participate to improve the overall budget of the company. In addition, the expenses part of the budget could be derived from budget A and sales part of the budget could be derived from Budget B. This mixed budget approach might mainly help in reducing the overall variance analysis of the company. The budget could be effectively divided between low level and high level, which in turn might help in supporting operations of the company. With the help of this approach the company could effectively reduce, the excess wastage for essential resources that might be conducted due to unavailability of limited information. In addition, the approach also helps in depicting the adequate money each department could need to continue their operations (Quere et al. 2013). Moreover, the approach could also help in develop a bond between low, medium and higher management of the company. Reference: Al-Mansour, F., Sucic, B., Pusnik, M. and Vuk, T., 2014, January. 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