Management and Cost Accounting Annotated Bibliography Order Instructions: Please create an annotated bibliography for the Case 21.1
Search for the following concepts when looking for appropriate resources:
•Variance analysis in cost accounting
•Budget versus actual gross margin
•Types of cost variance
•Division cost and variance analysis
The bibliography needs to be done as an APA formatted annotated bibliography. Please use the link below to see how an annotated bibliography is formatted.
•Each cited source needs to be specifically linked to the concepts in the case. Please do not cite random sources.
•Make sure your annotation captures the important point of the source. Please do not give a one-sentence summary.
Management and Cost Accounting Annotated Bibliography Sample Answer
Annotated Bibliography
DRURY, C. M. (2013). Management and cost accounting. Springer.
In accounting, the term variance analysis is a result of the relationship between costs of elements. To understand this term we need to find the meaning of the components of the term variance as used in accounting. Standard cost is defined as the pre-determined cost of a certain element of production. A standard cost is actually referred to as what an item must cost under given circumstances. The term standard costing, on the other hand, is different from the term standard cost. While standard cost is the cost of an item under a given circumstance, standard costing is the concept in accounting that is used to determine the standard for every element of cost. These costs predetermined by standard costing are compared with the actual costs of the elements and the deviation is referred to as variance. Therefore, Variance is defined as the particular difference between the actual cost and the standard cost for each element in a particular period. Variance analysis, on the other hand, is defined as the particular process through which variance is subdivided in such a way it enables the management to assign responsibility for off-standard performance. Therefore, the genesis of the term variance has been defined explicitly through first the definition of the components of the term itself, then the term variance and lastly variance analysis.
Datar, S. M., Rajan, M. V., Wynder, M., Maguire, W., & Tan, R. (2013). Cost accounting: a managerial emphasis. Pearson Higher Education AU.
Actual gross margin is defined as the difference between what is left of the selling price of a product after subtracting all the variable and not fixed costs involved in the sale of products. In simple words, the actual gross margin is the revenue received from the sale of an item minus the cost of the goods sold. In the business industries, budgets are the primary planning tools for any business. However, if the budget does not clearly outline the gross margin, then the approximation in the budget is not realistic and the business will fail. It will fail either from the wrong approximation of the prices of products and the wrong approximation of the money needed to start a business. This makes these businesses have prices of products that are too low in the cost of running the business becomes too high. Eventually, the business that appeared to be thriving fails. Hence, the significance of the gross margin which essentially shows the profit to be earned from selling a given product, is very crucial to a budget.
Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. PHI Learning.
From the definition of variance, we get three components of the production process that determine the type of cost variance. Two of the three components which are self-explained include material and labour. These two components result to the material cots variance and labour cost variance. The third component is the overhead cost. The overhead costs represent all the other costs that are not primal to the production process. Material cost variance is the difference between the standard material cost and the actual material cost. The difference between the two costs gives a deviation known as material cost deviation. Labour cost variance, is the difference between the standard wages that are specified and the actual wages that are paid. The difference between the wages specified and the wages aid is what gives birth to the variance known as labour cost variance lastly, the overhead cost variance refers to the difference between actual overhead cost incurred and the standard overhead cost absorbed. The components of the overhead costs include the actual overhead, standard hourly rate and standard hours of actual production. The three types of cost variance are according to the cost components of the production process.
Chidyausiku, C., Swanepoel, T., Barnard, J., De Jongh, T., Bibbey, F., & Kauta, L. (2015). Cost and managerial accounting control.
In managerial accounting, the terms division cost and variance analysis affect ad influence one another. Furthermore, one is used to determine the other term. Thus their relationship is quite significant. To explicitly understand the implicit meaning of these two terms. We need to define them and come up with the correct analysis of what they mean and refer to as afar as accounting is concerned. Variance in managerial accounting refers to the critical investigation of variances to financial performance from the standards identified in the company’s or organizational budget. Essentially, variance analysis helps a great deal in budgeting for the right amount of specific costs in the right way. It defined whether the business will be profitable by a certain gross margin or not. Therefore, variance analysis is a very significant to managerial accounting. In accounting, the division cost is calculated as the difference between the actual profit and the standard profit for what the business will achieve when some of the products are divided to the amounts that will fit the approximated cost of the budget. This element of costing is very dependent on the variance analysis of the various components of the cost variances. Hence, the division cost is determined only when the variance cost is determined. However, the two components seem to be proportional. In a way that when division cost is varied depending on the cost variance of a given component of production.
Management and Cost Accounting Annotated Bibliography References
Chidyausiku, C., Swanepoel, T., Barnard, J., De Jongh, T., Bibbey, F., & Kauta, L. (2015). Cost and managerial accounting control.
Datar, S. M., Rajan, M. V., Wynder, M., Maguire, W., & Tan, R. (2013). Cost accounting: a managerial emphasis. Pearson Higher Education AU.
DRURY, C. M. (2013). Management and cost accounting. Springer.
Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. PHI Learning.
