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Assignment - Cost Analysis For Business Decisions

The document outlines an assignment focused on applying standard costing and variance analysis in real-world businesses across various sectors. Students are required to select a company, gather actual cost data, analyze variances, and provide recommendations for improvement. The assignment includes detailed chapters on company profile, data collection, cost analysis, performance evaluation, and recommendations, along with a presentation summarizing findings.

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Vedant Agarwal
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13 views3 pages

Assignment - Cost Analysis For Business Decisions

The document outlines an assignment focused on applying standard costing and variance analysis in real-world businesses across various sectors. Students are required to select a company, gather actual cost data, analyze variances, and provide recommendations for improvement. The assignment includes detailed chapters on company profile, data collection, cost analysis, performance evaluation, and recommendations, along with a presentation summarizing findings.

Uploaded by

Vedant Agarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Cost Analysis for Business Decisions

Date of Announcement: 15th Jan 2025

Date of Submission: 30th Jan 2025

Date of Presentation: 2nd Week of Feb

"Application of Standard Costing/Variance Analysis in Real-World Scenario"

Objective: The purpose of this assignment is to apply standard costing technique to real-world
businesses across various sectors. Students will be required to analyse cost data, compare actual
performance with standard costs, and provide recommendations for improvement.
Outcomes:
 CO2: Students will select an industry and a company to explore and comprehend
costing parameters from a business standpoint.
 CO3: Students will analyze hypothetical cost data to calculate material and labour
variances, linking cost efficiency to business performance.
Assignment Details: Submission in the Stick File (Handwritten)
Assignment Overview:
You can select a real-time business in one of the following sectors:
 Manufacturing (e.g., automobile, electronics, consumer goods)
 Retail (e.g., supermarkets, online stores)
 Hospitality (e.g., hotels, restaurants)
 Healthcare (e.g., clinics, hospitals, pharmaceutical companies)
 Construction (e.g., real estate, infrastructure projects)
 Service-based businesses (e.g., consulting, IT services, financial services)
Content of the Assignment should include the following:
Chapter 1. Company Profile and Description:
Provide a brief overview of the selected business (name, sector, size, product/service). Explain
why this business was chosen for the assignment.
Chapter 2. Data Collection:
Gather data on the business’s actual costs for a specific period (e.g., one month or quarter).
This data should include:
 Direct materials costs
 Direct labor costs
 Manufacturing overhead costs (if applicable)
 Sales and administrative costs (if relevant)
Obtain standard costs or industry benchmarks for similar costs (e.g., average cost per unit, labor
hour rates, overhead allocation rates).
Chapter 3. Cost Analysis and Comparison:
Calculate the variance between actual costs and standard costs for the following categories:
 Materials variance (e.g., price and usage variances)
 Labor variance (e.g., rate and efficiency variances)
Provide explanations for any significant variances you find and assess whether the variances
are favorable or unfavorable.
Chapter 4. Performance Evaluation:
Analyze the reasons for variances. Consider factors such as:
 Inefficiencies in production
 Changes in supplier prices
 Labor issues (e.g., absenteeism, skill gaps)
 External market conditions (e.g., inflation, demand fluctuations)
 Technological changes or innovations that may have impacted costs
Use financial data (e.g., income statements, balance sheets) to help support your analysis.
Chapter 5. Recommendations for Improvement:
Based on your variance analysis, provide recommendations for how the company can improve
its cost control and performance. Suggest actions the business could take to reduce unfavorable
variances and better align actual costs with standard costs.
Recommend any improvements to the standard costing system, if relevant.
Presentation:
Prepare a short presentation (5-8 minutes) summarizing your findings, including key variances,
interpretations, and recommendations. Use visual aids such as graphs and charts to make your
points clearer.
Incorporate 5 Learning Outcomes Learnt from the Coursera
Assessment Criteria:
 Data Accuracy: Correct and relevant data is collected and analyzed appropriately.
 Analysis Depth: Clear explanation of variances, their causes, and their implications.
 Relevance of Recommendations: Practical and actionable recommendations based on
sound analysis.
 Report Quality: Clear, well-structured report with coherent arguments and
professional presentation.
 Presentation Skills: Ability to convey findings effectively in the oral presentation.
Note:
Ensure all data and calculations are based on actual or reasonably estimated data from the
selected business.
If you are unable to access detailed financial data for the chosen business, use publicly available
industry averages and benchmarks where possible.

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