...Management accounting is concerned with the provision and use of accounting information to managers within organizations, to facilitate the managers in their decision making and management control functions. Unlike financial accounting information (which, for the most part, is made publicly available), management accounting information is used within an organization and is usually confidential. (Jiambalvo) The distinction between traditional and innovative management accounting practices can be illustrated by reference to cost control techniques. Traditionally, management accountants’ principal cost control technique was variance analysis, which is a systematic approach to the comparison of the actual and budgeted costs of the raw materials and labor used during a production period. While some form of variance analysis is still used by most manufacturing firms, it nowadays tends to be used in conjunction with innovative techniques such as lifecycle costing and activity-based costing, which are designed with specific aspects of the modern business environment in mind. Lifecycle costing recognizes that managers’ ability to influence the cost of manufacturing a product is at its greatest when the product is still at the design stage of its product lifecycle (i.e., before the design has been finalised and production commenced), since small changes to the product design may lead to significant savings in the cost of manufacturing the product. Activity-based costing recognizes that...
Words: 374 - Pages: 2
...|Name of Course |Managerial Accounting | |Course Code |EBF 2043 | |Credit hours |3 | |Prerequisite |Accounting | |Synopsis |The course introduces the vital role played by management accounting and the information provided by management accounting information | | |systems (MAIS) in a firm or an organisation. Management accounting is used for decision making, learning, planning and controlling | | |activities that are supporting operational and strategic needs. It also supports continuous learning and improvement activities and | | |serves as a linkage between strategy and execution of that strategy. | |Learning outcomes |At the end of this course, students are able to: | | |Compare and explain about...
Words: 2279 - Pages: 10
...However, it has been in the need for a competent accountant who could provide them a more reliable and relevant financial reporting particularly the company’s cost accounting system and other methods. In order to meet its profit objectives and other ends, a specific cost accounting system is necessary for its budgets, and other management and accounting reports needed. STATEMENT OF THE PROBLEM S.W.O.T. ANALYSIS | |Strengths |Weaknesses | | |Cost items, its balances and details including |Product costs are not identified separately | | |production, sales and cash flow data are |from period costs. | | |already given. |Likewise, variable costs are not identified | | | |separately from fixed costs. | |Opportunities | | | |Profit objective of the Armstrong Helmet |Given all accounting details of the company, |Some details will not be relevant anymore in | |Company will help determine the appropriate |the costing system will easily be determined...
Words: 487 - Pages: 2
...ACC 122 Career Paper Managerial Accounting Managerial Accounting, also known as Cost Accounting, is defined as: “A branch of accounting that observes and calculates the actual costs of a company’s operations. It is the process of identifying, measuring, analyzing, interpreting, and communicating information in the pursuit of a company’s business goals. “ Farlex Financial Dictionary. (2012). Retrieved from: financial-dictionary.thefreedictionary.com/Managerial+Accounting Managerial accountants provide information to managers within a company. The managers then use the information to make decisions, prepare external reports, and budgets. They make decisions by analyzing the statements to evaluate performance and control costs in the most efficient way possible to meet the company’s goal. Managerial accountants must have a bachelor’s degree, in some places a master’s degree, and in some states be a CPA. Once a person becomes a managerial accountant they can work in an office or from home depending on the employer. With the rise in globalization, the need for managerial accountants familiar with international finance is also on the rise. Managerial accounting should not be confused with financial accounting as there are many differences between the two, outlined in the following table: Financial Accounting Managerial Accounting Must be accurate and timely Usually approximate but relevant & flexible Is compulsory under company law Except for few industries...
Words: 433 - Pages: 2
...Unit 1 IP Managerial Accounting Sheri Ann Heil American InterContinental University To: John Smith-CEO From: Sheri Heil-Manager/accounting department Date: February 12, 2012 Re: Hiring managerial accountant to focus on internal accounting Introduction This memo will explain the objectives of having another managerial accountant that would focus on internal accounting for the company. Above all this person will help organize these systems to be even more reliable for the board of directors and management to make concise decisions. Therefore making the meetings easier to connect with the internal accounting systems for the corporation, and help to clarify government regulations and corporate policies. The Objectives and Characteristics of an Internal Accounting System With this in mind, objectives of an internal accounting system are that it will support, encourage, and protect management practices. The general purpose for internal account system is that it supports the financial decision making and also supports the general decision making. This internal accounting system will help clarify that the government regulations are followed, all organization policies are compiled with, financial information will be reliable so that the board of directors and management can make these decisions correctly. Therefore, internal accounting systems will make sure that the assets and records of the firm are not stolen, misused or destroyed (M.U.S.E., 2012). The...
Words: 520 - Pages: 3
...How to use various accounting methods by Maxine Barclay Managerial Accounting Kristina Unutoa, Professor Abstract Accounting is a critical part of running a business. Since there are various forms of accounting that can be used, it is important to know which technique is best to use for what companies since they are unique. Once a particular technique is established, it is also important to keep an open mind if there are changes that need to take place in the organization. Keeping an open mind helps the company adjust and move forward in a timely fashion Most businesses exist to make a profit. Accounting is an important part in helping understand how the profits and expense amounts are derived. Accounting involves the process of summation, estimation, forecasting and analysis of financial transactions. Accounting can broken up into many areas which are all slightly different in nature depending on the process and objectives. Many of the formulas, statements and mechanisms are used and the fundamentals of them are still the same (Scholasticus, 2011) . Cost accounting systems record manufacturing activities for inventory systems that update records for cost of materials, goods in process and finished product. It must be timely information about inventory and manufacturing costs in order for management to control costs and set selling prices (Wild & Shaw, 2012). A cost accounting system requires five parts that include an input measuring basis...
Words: 1019 - Pages: 5
...Principles of Managerial Accounting—Fall 2013 Competencies |Competency |Description | |1 |Know difference between managerial and financial accounting. | |(Ch. 1-2) |Managerial accounting – provision of accounting info for a company’s internal users. It is the firms internal | |Q 1-6 |accounting system and is designed to support information needs for managers. (provide planning, controlling, | | |and decision making info) Internal accounting | | |Financial accounting – producing info for external users, including investors, creditors, customers, suppliers,| | |government agencies, and labor unions. External accounting | | |Identify cost classifications—Direct Materials, Direct Labor, Manufacturing Overhead, Nonmanufacturing costs. | | |Direct materials – materials that are part of the final product and can be directly traced to the goods being | | |produced. (tires on cars, wood in dining room table, alcohol in cologne, denim in jeans) | | |Direct labor – labor that can be directly traced to the goods being produced...
Words: 1092 - Pages: 5
...000 Because the company is already established it is very likely that advertisements can be cut down and have new patients by referrals. Professional meetings/dues $14,000 $8,500 $14,000 Cutting down meetings/dues will be considered a cut back by meeting via e-mail or memo. Worst case is to have staff pay for meetings/dues. Purchased services: Accounting and billing $15,000 Custodial $13,000 Security $12,000 Consulting $10,000 $0 $10,000 Consults should be a free service. I view a consult as a assessment at a mental health facility. Community mental health services Salaries( two social workers) $46,000 $23,000 $23,000 Two social workers are not needed for this facility. It’s difficult to let an employee go. Transportation $10,000 $5,000 $5,000 Outpatient m.h.t Salaries: Psychiatrist $86,000 Two social workers $70,000 $52,000 I believe there are numerous of individuals who seek outpatient treatment. So I would not terminate both employees but simply have one continue to work full time and the other part time. Managerial Accounting helps establish goals for the company and cost accounting is concerned with a company’s cost production. It is used to facilitate internal decision making, it also provides tools where management can appraise performance and control cost of doing...
Words: 283 - Pages: 2
...H. Xue Managerial Accounting 2015 Spring Homework 1 (Individual Assignment, Due on 02/11) 1. Das Doors Inc. has recorded the following costs at various volumes of production: Production Volume Total Costs 600,000 $700,000 400,000 500,000 200,000 300,000 Determine the fixed cost and per-unit variable cost using High-Low method. 2. Adams Company sells a single product. The product sells for $100 per unit. The company’s variable expenses are 80% of sales and its fixed expenses total $150,000 per year. a: What is the company’s contribution margin ratio? b: What is the company’s break-even point? (Give answer in dollars and in units.) 3. Jefferson Company reported $4,000,000 of sales during the month and incurred variable expenses totaling $2,800,000 and fixed expenses totaling $720,000. A total of 80,000 units were produced and sold last month. The company has no beginning or ending inventories. a: What is the company’s total contribution margin and contribution margin per unit? b: How many units would the company have to sell to achieve a desired target profit of $600,000? c: What is the company’s break-even point in sales dollars? d: What is the company’s margin of safety? e: What is the company's degree of operating leverage? 4. Parker and Spitzer Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers: ...
Words: 622 - Pages: 3
...WITH COST EFFECTIVENESS, SECOND IN PURSUING AN ORGANIZATION GOALS MANAGERS MAY MAKE MANY DECISIONS AND FOR THAT THEY NEED INFORMATION. THE INFORMATION NEEDS OF MANAGEMENT EXTEND ACROSS FINANCIAL, PRODUCTION, MARKETING LEGAL AND ENVIRONMENTAL ISSUES. DEFINITION: “MANAGEMENT ACCOUNTING IS THE PROCESS OF PRODUCING FINANCIAL AND NON FINANCIAL INFORMATION TO ASSIST MANAGERS AT ALL LEVELS OF AN ORGANIZATION. MANAGEMENT ACCOUNTING INFORMATION SHOULD BE DESIGNED TO MEET MANAGER’S SPECIFIC NEEDS AS THEY CARRY OUT THEIR PLANNING AND CONTROL FUNCTIONS AND MAKE SHORT AND LONG TERM DECISIONS.” OR “THE PRIMARY GOAL OF MANAGERIAL ACCOUNTING IS TO PROVIDE INFORMATION THAT HELPS MANGERS PLAN AND EVALUATE COMPANY ACTIVITIES AND MAKE BUSINESS DECISION. PROVIDING INFORMATION FOR PLANNING, EVALUATION AND DECISION MAKING IS THE PRIMARY OBJECTIVE OF MANAGERIAL ACCOUNTING. MANAGEMENT ACCOUNTING vs. FINANCIAL ACCOUNTING USERS OF INFORMATION ➢ FINANCIAL ACCOUNTING IS AIMED PRIMARILY AT EXTERNAL USERS LIKE BANKS ,SHARE HOLDERS, CREDITORS, STOCK EXCHANGE ETC EXTERNAL USERS NEED INFORMATION TO MAKE INVESTMENT , LENDING AND REGULATION DECISON WHERE AS MANAGERIAL ACCOUNTING IS AIMED PRIMARILY AT INTERNAL USERS (MANAGERS AT ALL LEVELS) WHO NEED INFORMATION FOR ROUTINE PLANNING AND EVALUATION DECISION OF FIRM’S INTERNAL...
Words: 597 - Pages: 3
...and manufacturing. We will scrutinize the similarities and differences in the flow of costs in these organizations, focusing particularly on how they accumulate costs for valuing inventory and reporting income. Because cost allocations play an integral role in this process, we end our discussion of this module with a brief overview of the mechanics of cost allocations. What we are going to discuss in this module is important because we need data to estimate costs and benefits. Invariably, we get this data from the accounting system and most systems are set up to comply with GAAP. Accordingly, it behooves us to understand how such systems work. All costs incurred are eventually recognized as expense in the income statement. However, some costs are recognized as expenses immediately and some costs are recognized as expense after a lag. The timing with which the costs of acquiring assets or services are recognized as expense is an important issue in accounting. An expense is defined as the cost incurred when an asset is used up or sold for the purpose of generating revenue. The terms product cost and period cost are used to describe the timing with which various expenses are recognized. A product cost is a cost assigned to goods that were either purchased for resale or produced for sale. In the period of the sale, the product costs are recognized as an expense called cost of goods sold. GAAP requires that costs are grouped according to business function. Therefore,...
Words: 2711 - Pages: 11
...Managerial accounting, “is an activity that provides financial and nonfinancial information to an organization’s managers and other internal decision makers” (Wild & Shaw, 2012, p.4). Being that I am a senior level manager in a large company, there are several types of accounting information that my staff and myself should consider when making decisions. The types of information I feel would be important are budgets, and cost-allocations (Vitez, 2011). Budgets are formal statements of a company’s plans for the future. Being that mostly all of a company’s future plans are related to financial or economic details, a budget would be of utmost importance (Wild & Shaw, 2012). The second thing that would be important to my staff and me would be cost-allocations. Management uses this data to be certain that all of the goods and services that are being bought by the company are being priced correctly for the consumers; thus making sure that the company is making a profit. Cost allocation is another one of the most important pieces of accounting information for a company to think about. Management puts together financial reports that show the amount of capital that is being put out for all of the company’s resources. Some of the most common cost-allocations are job costing, process costing, throughput costing, and activity-based costing (Vitez, 2011). Information Technology is a very essential part of communication between managers and their workers. This sort of technology...
Words: 369 - Pages: 2
...wiL1084x_fm_i-xxiv_1.indd Page i 1/10/11 7:53:00 PM user-f499 /Users/user-f499/Desktop/Temp Work/Don't Delete Job/MHBR231:Wild:203 Managerial Accounting John J. Wild University of Wisconsin at Madison Ken W. Shaw University of Missouri at Columbia 3 rd edition wiL1084x_fm_i-xxiv_1.indd Page ii 1/10/11 9:14:31 PM user-f499 /Users/user-f499/Desktop/Temp Work/Don't Delete Job/MHBR231:Wild:203 To my students and family, especially Kimberly, Jonathan, Stephanie, and Trevor. To my wife Linda and children, Erin, Emily, and Jacob. MANAGERIAL ACCOUNTING Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright 2012, 2010, 2007 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3 2 1 ISBN 978-0-07-811084-9 MHID 0-07-811084-X Vice president and editor-in-chief: Brent Gordon Editorial director: Stewart Mattson Publisher: Tim...
Words: 10500 - Pages: 42
...31 Complete the following questions on page 904: 2, 3, 4, 5, 6, 10, 11**, 12**, 13. **For 11 just explain the differences between direct and indirect materials instead what's asked in the book. **For 12 explain the differences between product cost and period cost, instead of what's asked in the book. 2. a) For financial accounting, they are external users: stockholders, creditors, and regulators. For managerial accounting, they are internal users: officers and managers. B) Financial accounting reports include financial statements, quarterly and annually. Managerial accounting includes internal reports as frequently as needed. C) Financial accounting reports are general-purpose. And Managerial accounting reports have a special-purpose for specific decisions. 3. The content of reports for financial accounting are: pertains to business as a whole, highly aggregated, limited to double-entry accounting and cost data, and generally accepted accounting principles. And the verification process is an audit by CPA. The content of reports for managerial accounting are: pertains to subunits of the business, very detailed, extends beyond double-entry accounting to any relevant data, and standard is relevance to decisions. In the verification process, there are no independent audits. 4. Since the budget is also used as an evaluation tool, some managers try to “game” the budgeting process by underestimating their division’s predicted performance so that it will be easier to meet their...
Words: 532 - Pages: 3
...Question 1 1 out of 1 points | | | Managerial accounting is primarily focused on | | | | | Selected Answer: | B. providing managers with relevant information to help achieve organizational goals. | Answers: | A. providing the Internal Revenue Service with information to determine the amount of taxes owed. | | B. providing creditors information on the status of their loans. | | C. providing managers with relevant information to help achieve organizational goals. | | D. providing investors with useful information for valuing securities. | Response Feedback: | Rationale: As the name implies, managerial accounting focuses on the information needs of managers internal to the business, unlike financial accounting, which addresses the information needs of investors, creditors, and other external stakeholders.LO: LO: 1Topic: Focus of Managerial Accounting | | | | | * Question 2 1 out of 1 points | | | In order to be useful to managers, management accounting reports | | | | | Selected Answer: | D. should be prepared to meet the specific needs of decision makers. | Answers: | A. should be prepared to meet the specific needs of decision makers. | | B. should be prepared according to Generally Accepted Accounting Principals. | | C. should not be prepared prior to the end of a fiscal reporting period. | | D. should be prepared according to the stated Institute of Management Accounting guidelines. | Response Feedback: | Rationale:...
Words: 13491 - Pages: 54
