3/9/23, 9:37 AM COST AND MANAGEMENT ACCOUNTING I GROUP (5) ASSIGNMENT

GROUP ASSIGNMENT (1)

GROUP 5 MEMBERS

1. SB/ACC/20/0195 - ANITA ABA COUFIE

2. SB/ACC/20/0205 - KUMA FELIX
3. SB/ACC/20/0215 - SEGOE MENSAH PRINCE
4. SB/ACC/20/0225 - NYARKOH JESSE BLESSING
5. SB/ACC/20/0245 - NKRUMAH-ARHIN DORCAS
6. SB/ACC/20/0255 - ABIGAIL BEIMAH AKOWUAH
7. SB/ACC/20/0265 - FRANCIS NANA PERKOH
8. SB/ACC/20/0275 - BOADU GEORGE OWUSU
9. SB/ACC/20/0285 - JULIANA SEREBOUR QUAICOE
10. SB/ACC/20/0355 - FATUMA HAIDARA

Question 1 (a)
Managerial accounting is a critical function in modern business, providing managers with
key financial information to make informed decisions about the organization's operations. In
particular, managerial accounting helps managers meet their responsibilities of planning,
organizing, controlling, and decision making in two key ways. The following explore ways
through which Managerial Accounting helps managers meet these responsibilities:

• Management Accounting provides information on the performance, profitability and

financial position of the organization. This aids in planning, forecasting and budgeting.
Information provided in cost, revenue and profit helps managers set goals, develop budgets
and make strategic decisions.

• Management Accounting helps to organize and control company’s operations by

providing information on cost and profitability of products, services and customers which
helps managers allocate resources effectively. It monitors the performance of the company’s

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department, divisions and projects and takes corrective measures where necessary. It
provides information which helps measure actual performance against set standards.

• With information provided by management accounting, managers are able to decide on

strategic issues of the company such as pricing, resource allocation, investment, product mix
and others. Decisions about most of the managerial functions of business are based on the
information provided by management accounting.

Question 1 (b)
Automation of repetitive tasks, performance of complex statistics, analysis of data and
others are mostly efficiently and effectively done with the use of python and spreadsheet
applications. Python and spreadsheet facilitates of managerial accountants in several ways
such as:

• Visualization: Spreadsheet and python are tools commonly used for financial analysis and
reporting. The ability create charts and graphs can help to communicate financial
information effectively to stakeholders. Advanced spreadsheet tools such as pivot tables and
conditional formatting can help identify trends and outliers in financial data.

• Automation: Python is used to automate repetitive task such as data entry and report
generation, saving time and reducing errors. Similarly, spreadsheet can be used to automate
calculations and data analysis reducing the time and efforts required to perform those tasks
manually thereby freeing up managerial accountants to focus on more complex analysis and
strategic decision making.

• Data analysis: Python is a powerful programming language for data analysis which allows
managerial accountants to quickly and easily analyse large sets of financial data. Python
provides a wide range of libraries and tools for data manipulation, visualization and
statistical analysis which can be used to identify trends, patterns and anomalies in financial
data.

• Modelling: Python and spreadsheet can be used to bud financial models that simulate
different scenarios and predict future outcomes. This helps in informed decision making and
evaluates the potential impacts of different business strategies.

• Customization: Python and spreadsheet are highly customable. This means they can be
tailored to meet the specific needs of an organization. For example, python can be used to
create customer financial models while spreadsheets can be used to create templates and
reports.

• Integration: Python and Spreadsheet can be integrated with other software tools such as
business intelligence tools or accounting software to provide a more comprehensive view of
an organization’s financial and non-financial performance.

In all, skills in data analytics tools such as python and spreadsheet can greatly enhance the
effectiveness of managerial accountants by enabling them to work more efficiently, identify
trends and patterns in financial data, communicate financial information effectively and
inform decision making through the use of financial models.

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Question 2 (i)
In [2]: import pandas as pd
import numpy as np
import matplotlib.pyplot as plt
import statsmodels.api as sm
import os

In [3]: level_of_wage = [15000,20000,17000,9000,18000,24000,37000,24000,19000,21000,39000,2

print(level_of_wage)

[15000, 20000, 17000, 9000, 18000, 24000, 37000, 24000, 19000, 21000, 39000, 2400
0, 22000, 27000, 19000, 20000, 24000, 23000, 17000, 21000]

In [4]: len(level_of_wage)

20
Out[4]:

In [5]: years_of_education = [2,5,5,2,5,7,10,5,6,2,7,8,5,6,4,4,5,5,4,7]

print(years_of_education)

[2, 5, 5, 2, 5, 7, 10, 5, 6, 2, 7, 8, 5, 6, 4, 4, 5, 5, 4, 7]

In [6]: len(years_of_education)

20
Out[6]:

In [7]: years_in_post = [5,3,7,2,8,4,11,7,4,8,12,8,6,9,4,5,2,6,3,4]

print(years_in_post)

[5, 3, 7, 2, 8, 4, 11, 7, 4, 8, 12, 8, 6, 9, 4, 5, 2, 6, 3, 4]

In [8]: len(years_in_post)

20
Out[8]:

In [9]: number_of_previous_job = [0,1,2,0,2,3,2,1,0,4,2,1,2,1,1,2,3,1,4,1]

print(number_of_previous_job)

[0, 1, 2, 0, 2, 3, 2, 1, 0, 4, 2, 1, 2, 1, 1, 2, 3, 1, 4, 1]

In [10]: len(number_of_previous_job)

20
Out[10]:

We assign the name "wages" to our Dictionary and Dataframe

In [11]: wages = {'level_of_wage':level_of_wage, 'years_of_education':years_of_education, 'y

print(wages)

{'level_of_wage': [15000, 20000, 17000, 9000, 18000, 24000, 37000, 24000, 19000, 2
1000, 39000, 24000, 22000, 27000, 19000, 20000, 24000, 23000, 17000, 21000], 'year
s_of_education': [2, 5, 5, 2, 5, 7, 10, 5, 6, 2, 7, 8, 5, 6, 4, 4, 5, 5, 4, 7], 'y
ears_in_post': [5, 3, 7, 2, 8, 4, 11, 7, 4, 8, 12, 8, 6, 9, 4, 5, 2, 6, 3, 4], 'nu
mber_of_previous_job': [0, 1, 2, 0, 2, 3, 2, 1, 0, 4, 2, 1, 2, 1, 1, 2, 3, 1, 4,
1]}

In [14]: wages = pd.DataFrame(wages)

print(wages)

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level_of_wage years_of_education years_in_post number_of_previous_job

0 15000 2 5 0
1 20000 5 3 1
2 17000 5 7 2
3 9000 2 2 0
4 18000 5 8 2
5 24000 7 4 3
6 37000 10 11 2
7 24000 5 7 1
8 19000 6 4 0
9 21000 2 8 4
10 39000 7 12 2
11 24000 8 8 1
12 22000 5 6 2
13 27000 6 9 1
14 19000 4 4 1
15 20000 4 5 2
16 24000 5 2 3
17 23000 5 6 1
18 17000 4 3 4
19 21000 7 4 1

Question 2 (ii)
We assign the name "wages" to our imported CSV file

In [16]: os.chdir('C:/python training')

wages = pd.read_csv('level_of_wage.csv')
print(wages)

level_of_wage years_of_education years_in_post number_of_previous_jobs

0 15000 2 5 0
1 20000 5 3 1
2 17000 5 7 2
3 9000 2 2 0
4 18000 5 8 2
5 24000 7 4 3
6 37000 10 11 2
7 24000 5 7 1
8 19000 6 4 0
9 21000 2 8 4
10 39000 7 12 2
11 24000 8 8 1
12 22000 5 6 2
13 27000 6 9 1
14 19000 4 4 1
15 20000 4 5 2
16 24000 5 2 3
17 23000 5 6 1
18 17000 4 3 4
19 21000 7 4 1

Question 2 (iii)
The response variable is "level_of_wage" and the predictor variables are
"years_of_education", "years_in_post" and "number_of_previous_job"

Question 2 (iv)

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In [17]: plt.scatter(wages['years_of_education'], wages['level_of_wage'])

plt.title('Relationship between Level of Wages and Years of Education')
plt.xlabel('Years of Education')
plt.ylabel('Level of Wages')
plt.grid('true')
plt.show()

In [21]: plt.scatter(wages['years_in_post'], wages['level_of_wage'])

plt.title('Relationship between Level of Wages and Years in Post')
plt.xlabel('Years in Post')
plt.ylabel('Level of Wages')
plt.grid('true')
plt.show()

In [22]: plt.scatter(wages['number_of_previous_jobs'], wages['level_of_wage'])

plt.title('Relationship between Level of Wages and Number of Previous Jobs')
plt.xlabel('Number of Previous Jobs')
plt.ylabel('Level of Wages')
plt.grid('true')
plt.show()

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Question 2 (v)
"number_of_previous_jobs" should be excluded from the regression analysis. This is because
with a correlation coefficient of 0.223968, it shows a weak positive relationship with
"level_of_wage" and hence, not significant for inclusion in the regression model

Question 2 (vi)
We must first include a constant to our table since Python, by default, does not report the
constants in tables

In [26]: wages = sm.add_constant(wages)

wages

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Out[26]: const level_of_wage years_of_education years_in_post number_of_previous_jobs

0 1.0 15000 2 5 0

1 1.0 20000 5 3 1

2 1.0 17000 5 7 2

3 1.0 9000 2 2 0

4 1.0 18000 5 8 2

5 1.0 24000 7 4 3

6 1.0 37000 10 11 2

7 1.0 24000 5 7 1

8 1.0 19000 6 4 0

9 1.0 21000 2 8 4

10 1.0 39000 7 12 2

11 1.0 24000 8 8 1

12 1.0 22000 5 6 2

13 1.0 27000 6 9 1

14 1.0 19000 4 4 1

15 1.0 20000 4 5 2

16 1.0 24000 5 2 3

17 1.0 23000 5 6 1

18 1.0 17000 4 3 4

19 1.0 21000 7 4 1

In [27]: reg_res = sm.OLS(wages.level_of_wage, wages[['const','years_of_education','years_in

print(reg_res.summary())

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OLS Regression Results

==============================================================================
Dep. Variable: level_of_wage R-squared: 0.769
Model: OLS Adj. R-squared: 0.726
Method: Least Squares F-statistic: 17.78
Date: Thu, 09 Mar 2023 Prob (F-statistic): 2.39e-05
Time: 08:43:00 Log-Likelihood: -189.57
No. Observations: 20 AIC: 387.1
Df Residuals: 16 BIC: 391.1
Df Model: 3
Covariance Type: nonrobust
==================================================================================
=========
coef std err t P>|t| [0.025
0.975]
----------------------------------------------------------------------------------
---------
const 4705.3634 2590.996 1.816 0.088 -787.303
1.02e+04
years_of_education 1727.5690 457.966 3.772 0.002 756.724
2698.414
years_in_post 1133.0231 328.200 3.452 0.003 437.271
1828.776
number_of_previous_jobs 985.7223 690.694 1.427 0.173 -478.483
2449.928
==============================================================================
Omnibus: 0.980 Durbin-Watson: 2.053
Prob(Omnibus): 0.613 Jarque-Bera (JB): 0.184
Skew: -0.200 Prob(JB): 0.912
Kurtosis: 3.246 Cond. No. 28.5
==============================================================================

Notes:
[1] Standard Errors assume that the covariance matrix of the errors is correctly s
pecified.

Question 2 (vii)
The Prob (F-statistic) of 2.39e-05 suggests that the regression model as a whole is
significant, since it is less than 0.05 The Adjusted R-squared of the regression model implies
the co-efficient of determination is 0.726. This means that 72.6% of the variation in the
response variable can be explained by the various predictor variable The intercept value is
not significant because its p-value is greater than 0.05 For the individual variables:

• years_of_education is statistically significant because its p-value is less than 0.05 •

years_in_post is also statistically significant because its p-value is less than 0.05 •
number_of_previous_jobs is insignificant because its p-value is greater than 0.05 We have
the regression equation to be: Y = 1727.57E + 1133.02P, Where Y = level_of_wage, E =
years_of_education and P = years_in_post To interpret the predictive power of each of the
predictor variables:

• A one-year increase in the number of year the worker has been at post, will lead to a
GHC1133.02 increase in his or her level of wages. • A one-year increase in the number of
years of formal education received by the worker, will lead to a GHC1727.57 increase in his
or her level of wages.

Question 3
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1. I
2. H
3. D,G
4. C
5. E,K
6. D,G
7. J,A

In [ ]:

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