Management Accounting - Reflective Journal

  This is the toughest challenge for me in my university life since I have enrolled in this module. Tuesday is macroeconomics individual assignment due date and the next day is management accounting due date. There are approximately 3000 words for me to done it. I will not complain anything about the both assignment’s due date arrangement because I knew it was a strategy set by lectures to test us and stimulate our potential. And now I realize why my parents are willing to pay expensive school fees sending me to Taylors University, because it is worth.

  Management Accounting is a course which is totally different comparing to Financial Accounting as it does not have a fixed format to answer any question. It requires more critical thinking compare to skills and techniques. I found it difficult in converting my ideas to answer because there is no specific format for me the follow. Moreover, poor “common sense” is my critical weakness. With my poor common sense, I hardly successfully start writing my tutorial answer without referencing suggested answer.      

Focusing back to the individual assignment, it was harder than I thought. Although it only requires a few chapters of knowledge to complete it, but the process from understanding to implementing my knowledge is a huge stumbling stone for me to overcome. Therefore, I asked for further assist from my best friends.  I’m appreciated that they never being selfish by sharing their knowledge with us.

Through this assignment, I had increased and strengthen my knowledge about activity-based costing. Activity-based costing offers a more exact vision of product cost, but companies normally use it as an additional costing system. The allocation bases used in activity-based costing differ from those used in traditional costing. Activity-based costing defines every activity related with manufacturing an item and allocates a cost to the activity. The cost assigned to the activity is then allocated to products that need the activity for production. Oppositely, the reciprocal allocation method is the process of allocating service department costs to production departments; where reciprocal services are allowed between service departments and the method sets up simultaneous equations to determine the alocatable cost of each service department.

In the other hand, I have enhanced my ability to differentiate the difference between direct cost and indirect cost.   Materials, labour and expenses which is related to the production of a product can be considered as a direct cost. Apart from that, cost which is more difficult to differentiate such as depreciation or administrative expenses can be considered as indirect cost.

In a conclusion, I have a deeper understanding about the purpose and the function of Management Accounting in our real world. If we put it in a good use in our daily life, we may help the company create a competitive advantage by developing cost allocation processes in their management accounting function.