Management Accounting and how it can be defined Essay

Management Accounting and how it can be defined - Essay modellingIn other words a more complex definition of Management Accounting expands the simple one and states that the process of providing the information required by management for planning, Organizing and controlling for goals such as Recording, Analyzing and reporting on the actual cost and inputs of products, services and processes in which we are very much concerned and which is likewise our set-back question Working with starting cost, function, standard of performance, revenue and quantity budgets, which is related to our second and third questions, Evaluating Alternative Opportunities, this is last and fourth question. Starting with our first question and second question simultaneously, we give find out the Total Fixed Cost, Contribution Margin, variable cost and Brake Even Point Andre is runnel a hair cutting saloon in which 5 Barbers function for him 40 hours/week, 50 weeks/year and being paid $9.90 per hour rega rdless of the numeral of the haircuts and every one who has a hair cut gets his hair washed so the charger for the lave or hair wash is assumed to be already included in it which go away come under fixed cost by which his Fixed Cost per year will be $99,000 and $1,750 is the hang-up and other fixed expenses per month which again comes under Fixed cost by which his Total Fixed Cost per year will increase by $21,000 and the Total Fixed Cost will be $120,000/year and $10,000/month (this calculation is do on yearlymonthly basis). ... Yearlymonthly basis (this calculation is done generally). As we now have our T.F.C i.e. $120,000 we have to calculate Break Even Point i.e. how many haircuts should be done so that we get $120,000 and i.e. 10,000haircuts/year should be done so that we dont get a loss and that is our B.E.P in units. Here there is no Variable cost i.e. no such sort of charges which will increase or decrease the meat cost.Moving to our 3rd question i.e. if 20,000 haircut s are performed what will be the Operating income (profit), as we have calculated before our T.F.C i.e. $120,000 which will not change if we do either 1or 10,000 Haircuts/year. Assuming that the cost for one hair cut $12 and if we do 20,000 haircuts our income will be $240,000 and now subtracting the total expenses or T.F.C i.e. $120,000 we get an Operating income i.e. a profit of $120,000. As we have assumed $12/haircut we have included the taxes, Wages, rent, all the fixed expenses, the cost of shampoo and other required material in it. After all this we get a good profit of $120,000 if the saloon kit and caboodle as mentioned i.e. 50weeks/year and the barbers work for 40hours/week. Now for supporting this statement one barber works 2000hours/year as per the calculation and has to do a Minimum of 2haircuts/hour, 80haircuts/week if he works 8hours/day, 5days/week which is again 40hours/week and in 50weeks he can do 4000haircut, if similar calculation is done for the other 4 Barber s our task for 20,000 haircuts will be achieved. In our 4th and last question Andre decides to pay in a revised or in a different way i.e. by diminish the Wages/hour and giving money/haircut. Andre decides to pay $4/hour i.e. fixed cost and $6/haircut which is