Current Status of Cost Management Accounting Information Analysis for Decision Making and Cost Control at Tu Loc Joint Stock Company

2.2.4. Current status of cost management accounting information analysis for decision making and cost control at Tu Loc Joint Stock Company

2.2.4.1. box to score

To see the actual situation of cost and price management, the enterprise must analyze the fluctuations of each cost item, between the implementation and the estimate of each product. Based on the assessment of the fluctuations in quantity and price of each production cost item, the accountant analyzes the causes of the increase or decrease in costs. During the research period, at Tu Loc Joint Stock Company, the company did not analyze the differences for each cost element but only compiled a summary table of costs including material costs, labor costs and construction machinery costs, only determining the difference between the expected price and the actual price. Although there were differences, the company did not focus on analyzing the differences, finding the causes and providing solutions, but only focused on calculating the price difference data.

* Dangerous phase

Raw material costs are a cost item that accounts for a large proportion of total costs. The fluctuation of this cost has a great impact on product prices. Due to the diversity of raw materials of the Company, it is difficult to control this cost.

Table 2.10. Summary table of materials and price differences

Project: Clubhouse

Unit: D

STT

Target	Unit	Quantity	Original price	Nut price maths	Difference deviated	Note
	A	1	2	3	4	5=4-3	B
1	Chandelier ceiling panel 1	The	4	8,950,755	8,950,755	0
2	Chandelier 5	The	5	20,250,000	21,120,500	870,500
3	Wall lamp 2	The	4	19,350,500	20,430,500	1,080,000
…	….	….	….	….	….	….	….
47	Bolt m6x25	The	304	950,000	985,500	30,500
48	Material other					1,135,450
	Total			69,443,493	72,894,393	3,450,900

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N :

From the analysis table, we see that the actual cost of raw materials increased compared to the original plan by 3,450,900 VND. This shows that the company has not really managed the input materials effectively to serve production requirements. However, the analysis table has not yet pointed out the cause of this difference. The higher actual cost may be due to the increase in the actual purchase price of raw materials, possibly due to fluctuations in market prices, the skill of workers who are not careful and do not have expertise, causing the consumption of raw materials to increase compared to the company's original plan.

* oh

In the Company, besides the CPNVLTT which accounts for a large proportion of the total cost, CPNCTT also accounts for a significant part and has a great influence on the cost. With each economic contract, the Company's Planning Department makes this cost estimate based on the norms of each material and based on the technical requirements of each project and project item.

Table 2.11. Direct labor cost variance

Unit: D

Target

Estimate	Perform	Difference	Note
A	1	2	3=2-1	B
Level 3.0 7 workers	20,576,700	21,153,785	577,085
Level 3.5 7 workers	4,665,844	5,211,505	545,661
Level 4.0 7 workers	6,049,875	7,053,712	1,003,837
Level 2.5 7 workers	4,228,031	5,749,331	1,521,300
Total	35,520,450	39,158,333	3,647,883

N: From the analysis table, we see that the actual NCTT cost increased compared to the estimate by an amount of 3,647,883 VND, however, the reason for the difference has not been pointed out yet. It is only seen that the cost has increased without being able to determine whether it is due to the unit price of workers or the actual volume of work. The reason for the increase may be due to increased production demand, the company has to work overtime for workers, allowances, rewards, incentives, etc.

encourage workers to increase productivity

* tissue

For the Clubhouse project, there is no difference in construction machine costs, however, the change in construction machine costs may be due to changes in the price or amount of machine oil used, which shows whether the company is effectively managing the use of construction machines or not. In case the company has a difference in the use of construction machines, the accountant also needs to clarify the cause of the difference in order to have timely and appropriate adjustment policies.

* b degree of light

The CPSXC item includes many production-related cost items arising in the workshop such as workers' salaries, salary deductions, depreciation... With the characteristics of the Company, CPSXC is divided into 2 types:

General manufacturing costs are directly aggregated to the following items: costs

technical salary, temporary camp costs.

Estimated general production costs are 18,711,308 Actual general production costs incurred are: 23,250,946

The manufacturing overhead variance of 4,539,638 shows that the costs incurred were higher than budgeted.

In summary, the analysis of cost differences at Tu Loc Joint Stock Company only stops at the level of checking and comparing the actual production cost with the estimated cost of each project and project item, only for the purpose of evaluating the effectiveness of construction activities but not for the purpose of decision making. Through the above analysis of the cost between the implementation and the estimate of the Clubhouse item, we can see that in general, the Company has completed the set plan, but the costs incurred in the period are higher than the estimate, showing that the Company has not controlled its costs well. The Company needs to have timely policies in cost management to reduce costs, lower service prices to increase profits in the period.

2.2.4.2. cell to place

Company leaders often have to face many choices and require information to consider and weigh options, thereby making the right and effective decisions.

most effectively. Therefore, controlling and analyzing information on cost factors plays an increasingly important role in providing the necessary information for the board of directors to make decisions. For Tu Loc Joint Stock Company, deciding to choose a construction organization or hire a subcontractor, analyzing cost information to make decisions is very necessary for the company's board of directors.

Construction products are divided into many construction items, so there is often a decision to organize the construction of all construction items or hire subcontractors to perform certain items. Due to lack of construction capacity or failure to meet the progress of the investor, the company decides to hire subcontractors. In this case, to make an appropriate decision, the company needs to analyze information on revenue and cost differences between the two options compared to the bid price, the option with higher advantages will be prioritized. In the case of giving a bid price for a project: Construction products are often priced after a site survey, studying the investor's documents and bid prices. The company needs to analyze and minimize unexpected costs to give the most appropriate bid price.

At Tu Loc Joint Stock Company, the accounting organization focuses mainly on financial accounting. In the accounting department, most of the management accounting work is handled by the general accounting department. Most of the information applied to management accounting by the general accounting department is mostly provided by other departments. Much of the information is still past information.

However, the general accounting department has also cooperated with the budget department, the production and business evaluation department of the business planning department has also issued a number of reports such as: Summary report on production costs and cost calculation, cost fluctuation situation between implementation and budget. This is very meaningful as it provides a lot of information for the company's management to make decisions related to planning and controlling the company's activities.

Table 2.12. Summary report of production costs and cost calculation

Quarter 4/2019

Unit:

STT

Project product	Production costs in the reporting period				Total expense	Expense incomplete		Price capital
Project product	NVLTT	NCTT	MTC	CPSXC	Total expense	Head	end	Price capital
1.	Restaurant Van Son	79,683	30,080	5,900	16,705	132369	-	-	132369
2.	Home Clubhouse	64,835	45,678	8,000	20,700	129215	-	-	129215
…	..	….	…	…	…	…
	Total	1,796,921	21758	57900	121406	2193810	-	-	2193810

N :

However, at Tu Loc Joint Stock Company, the use of cost management accounting information to make business decisions has not yet been implemented.

2.3. Evaluation of the current status of cost management accounting at Tu Loc Joint Stock Company

2.3.1. Advantages

- About : Tu Loc Joint Stock Company classifies and aggregates costs according to economic content (Material costs, Salary costs, Social insurance, Health insurance, Trade union fees, Fixed assets costs, Outsourcing service costs, Other cash costs) and according to cost items. This is a suitable classification method for building realistic cost norms in the current conditions of manufacturing enterprises. The organization of production cost accounting and product costing is carried out relatively scientifically, the cost aggregation objects are works and construction items that reflect the production and business characteristics of the construction and installation enterprise type and at the same time meet the management requirements set by the enterprise. The company has classified production costs into direct costs and indirect costs. Information on direct and indirect costs above is used to evaluate the production efficiency of each construction and installation team. At the same time, this classification helps managers control the cost structure, thereby being able to propose improvement measures to save costs, such as changing the construction plan to save general costs or construction equipment costs.

- Regarding material level : The company has focused on the work of making estimates and construction plans for each specific project item, so the company is more proactive in evaluating production activities as well as having measures to adjust appropriate bidding prices after carefully researching the market, competitors and technical characteristics of each project.

- Regarding costs : The company has done a good job of recording costs and calculating the cost of construction works and items. Costs and production costs have been determined through detailed and complete accounting of costs incurred in accordance with the characteristics of construction activities. The company has determined the objects of cost aggregation and cost calculation as construction items or completed works, which is consistent with reality. The company has built a system of general and detailed accounting accounts to serve the work of accounting for production costs. Cost items have been aggregated on accounts to facilitate the calculation of costs, preparation of production cost reports as well as financial reports.

- About the box vv v point s

cost in business

The company has initially applied the method of comparing actual costs with estimates to find differences, thereby providing information for management levels to make appropriate and effective management and operation decisions.

Regarding the cost reporting system in the Company: The Company has applied the organization of cost information system according to the production process and is collected for each project according to the actual costs incurred. This organization is suitable for the characteristics of production and business and the cost management regulations of the Company today. The accounting account systems are opened fully and in detail to ensure the cost tracking process is accurate. Reports are created to provide administrators with necessary information about costs as well as the prices of the Company's construction projects. Reports are created at the end of each quarter.

2.3.2. Limitations and causes

Besides the achieved results, there are still some limitations in cost management accounting at Tu Loc Joint Stock Company:

* Limit:

- About

Regarding cost classification, it does not meet the requirements of cost management: Cost classification at the company does not serve the practical purpose of management accounting, especially in the analysis of the relationship between cost - volume - profit, or providing necessary information for the application of management accounting tools in business management activities, for example, making investment decisions, or making decisions in the Company's production and business operations: outsourcing or not outsourcing to organize the construction of all items of the project... The company has not yet built and implemented a cost management accounting model, so the information system on production costs depends on the reports of the financial accounting department. Most of the costs in Tu Loc Joint Stock Company are classified by cost items, not by cost behavior. The company has not yet classified production costs according to the requirements of planning and inspection to make business decisions. Therefore, managers do not have information about differential costs, opportunity costs, sunk costs, etc. as a basis for choosing business plans. On the other hand, information about current costs is compiled from financial accounting data sources, so information about past costs is of little value to managers' production management decisions.

The failure to classify costs according to the level of behavior also affects the determination of service costs and the provision of information for management accounting. The collection of costs is not fast and not accurate. The reason is that there are costs that are not accounted for correctly, are not allocated correctly and currently there is no management accounting reporting system that meets the requirements of business leaders.

- About the level of education

The evaluation of the implementation of standard costs has not been paid attention to and implemented. Although the company's budget system is available for each project, it has not been detailed into specific work content, each cost item as well as each stage, so it has not helped managers grasp the general situation of costs and project prices, thereby planning production as well as mobilizing necessary resources. Most of the company's budgets are prepared by the Engineering Department.

The company's budget system is established for the purpose of serving the bidding work in the company, not for management accounting work. Therefore, the company's budget system is not used to analyze and evaluate the implementation of the company's cost plan.

- Yes, I can.

The allocation of general production costs and construction machinery costs related to many projects and construction items... only chooses a single allocation standard such as direct labor costs, direct material costs for all general production cost factors and construction machinery costs (because these costs have not been organized in detail by factor). This will cause the cost of projects and construction items to be aggregated inaccurately because general production costs and construction machinery costs include many different contents (factors), are affected by many different activities and they themselves include both variable and fixed cost factors, so if only one allocation criterion is taken, it will not accurately reflect the construction machinery costs and general production costs allocated to each project and construction item.

Currently, the company has not yet determined the cost-bearing objects from the perspective of management accounting. The reason is that the company does not have a specific management accounting department and an account system applied to determine the cost-bearing objects for management accounting.

- About the box vv v point s

- Cost relationship analysis for decision making: Business managers have not yet thoroughly used cost information analysis for the decision making process. The company has only focused on determining revenue and cost of goods sold to determine the gross profit ratio without analyzing the cost-volume-profit relationship. Thus, cost accounting is not really a powerful tool for managers in cost management and finding cost management solutions. This limitation comes from the following reasons:

First, the classification of the Company's costs is simply for the purpose of preparing financial statements and determining profits. Accountants are not interested in researching and analyzing

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