Managerial Accounting Essay

Submitted By njones98
Words: 1036
Pages: 5
Open Document
Principles of Managerial Accounting—Fall 2013 Competencies
Competency Description
1
(Ch. 1-2)
Q 1-6 Know difference between managerial and financial accounting.
• Managerial accounting – provision of accounting info for a company’s internal users. It is the firms internal 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. (workers on an assembly line)
• Manufacturing overhead – factory burden or indirect manufacturing costs. (depreciation on plant buildings and equipment, janitorial and maintenance labor, plant supervision, materials handling, power for plant utilities, plant property taxes.)
• Nonmanufacturing costs – period costs (office supplies, research and development, ceo salary, advertising), Selling cost (salaries and commissions of sales personnel, advertising, warehousing, shipping, and customer service), Administrative costs (executive salaries, legal fees, printing the annual report, and general accounting).
Know difference between Direct and Indirect costs.
• Direct costs – costs that can be easily and accurately traced to a cost object.
• Indirect costs – costs that cannot be easily and accurately traced to a cost object.
Know difference between Product and Period costs.
• Product costs – total product cost equals the sum of direct materials, direct labor, and manufacturing overhead.
• Period costs - office supplies, research and development, ceo salary, advertising
Prepare and analyze Schedule of Cost of Goods Manufactured.
• Direct materials + direct labor + manufacturing overhead = Total manufacturing cost
• Total manufacturing cost + WIP 1st of month – WIP 31st of month = cost of goods manufactured
2
(Ch. 5)
Q 7-11 Know job-order costing cost flows. Determine which costs are included on a job cost sheet.

Calculate predetermined overhead rate.
• Overhead / direct labor cost
Calculate applied overhead and know how to dispose of over/under-applied overhead.
• Predetermined overhead rate X direct labor cost
• Over applied subtracted form cost of goods sold
• Under applied added to cost of goods sold
3
(Ch. 3)
Q 12-16 Determine cost behavior—Variable and Fixed.
• Fixed cost – cost that in total are constant within the relevant range as the level of output increases or decreases. (cost of airplanes to an airline,
• Variable cost – costs that in total vary in direct proportion to changes in output within the relevant range. (producing and assembling the propeller on each boat manufactured, certain supplies in a dentist office such as disposable bib, floss, x-ray)
Identify mixed costs.
• Mixed costs – costs that have both a fixed and a variable component. (sales rep that is paid salary plus commission)
Calculate cost formula using high-low method.
• Total cost = fixed cost + (variable rate X Number of xxx)
• Variable rate =(high point cost – Low point cost) / (High point output – low point output)
• Fixed cost = total cost high point – (variable rate X output at high point)
• Fixed cost = total cost low point – (variable rate X output at low point)
4
(Ch. 4)
Q 17-22 Know difference between traditional and contribution format income statement.
• Contribution – difference between sales and variable expense.
Prepare contribution format income statement.
• Variable cost per unit = direct materials + direct
Show More

Related Documents: Managerial Accounting Essay

Managerial Accounting

Managerial Accounting Basics 1. (S.O. 1) Managerial accounting is a field of accounting that provides economic and financial information for managers and other internal users. Managerial accounting applies to all types of businesses—service, merchandising, and manufacturing—and to all forms of business organizations—proprietorships, partnerships and corporations. Managerial accounting is needed in not-for-profit entities as well as in profit-oriented enterprises. Comparing Managerial…

Words 1050 - Pages 5

Notes On Managerial Accounting

Chapter 1-1 CHAPTER 1 MANAGERIAL ACCOUNTING Managerial Accounting, Fifth Edition Chapter 1-2 Study Study Objectives Objectives 1. Explain the distinguishing features of managerial accounting. 2. Identify the 3 broad functions of management. 3. Define the 3 classes of manufacturing costs. 4. Distinguish between product and period costs. 5. Explain the differences between a merchandising and a manufacturing income statement. Chapter 1-3 Study Study Objectives Objectives 6. Indicate…

Words 2485 - Pages 10

Essay on managerial accounting

Managerial Accounting Chapter # 01 Homework 1 01) How does managerial accounting differ from financial accounting? A: Managerial accounting is concerned with providing information to managers for use inside the organization. Financial accounting is con¬cerned with providing information to stockhold¬ers, creditors, and others outside of the organi¬zation. 02) Pick any major television network and describe some planning and control activities that its managers would engage in. A: Five examples…

Words 943 - Pages 4

managerial accounting Essays

Managerial accounting is based on informational systems for determining internal planning, business decisions, and control influence to establish the value of a company. This textbook include 15 chapters which mentioned in this study are reporting & decision, performance measurement, budgetary control and capital investment. Actually, I am not interested in all of 15 chapters, only chapter 8--Profit Planning, chapter 9--Flexible Budgets and Performance Analysis, Chapter 11—Performance Measurement…

Words 329 - Pages 2

The Role Of Managerial Accounting

Date: January 13, 2013 Subject: Managerial Accountant Managerial accounting’s focus is the use of economic and financial information in order to support management in making decisions (Vitez). It plays an important role in: * Planning and coordination with production * Marketing functions * Financial functions This position will also focus on the determination and accumulation of products, processes, and service costs (cost accounting). A managerial accountant will be the individual…

Words 646 - Pages 3

Notes On Managerial Accounting

exercise M1-1 thrue M1-3. E1-3, E-5, E-6, E-8, E-9, E-11, P1-1 1) it is a system that processes and collect financial info. About the org. and presents that info. To the decision makers. 2) *Financial accounting is focus in the external decision makers and prepare 4 financial statements. *Managerial accounting is information more detailed for internal use, which reports to the owners about the conditions and transactions of the company. 3) The internal group are the managers or personal which is inside…

Words 508 - Pages 3

Accounting Managerial Essay

intended user’s understanding of the reports, comments, and recommendations presented.” Apart from the ethical issue, there is also a very practical consideration. If Merced Home Products becomes embroiled in controversy concerning questionable accounting practices, Stacy Cummins will be viewed as a responsible party by outsiders and her career is likely to suffer dramatically and she may even face legal problems. We would suggest that Ms. Cummins quietly bring the manipulation of earnings…

Words 1613 - Pages 7

Managerial Accounting Vs Cost Accounting

Abstract The objective is to explain the difference of managerial accounting and cost accounting. Also, to give details and find the purpose of the lean and typical production process and how they both vary differently. Lastly, give Dr. White some information and a proposal on how to prepare for a decreased budget. MANAGING COST Introduction In our ever changing business world, each organization must find ways to make tight budgets work. Management are always facing ways to increase the…

Words 918 - Pages 4

Importance of Managerial Accounting Essay

Introduction The purpose of management accounting in the organization is to support competitive decision making by collecting, processing, and communicating information that helps management plan, control, and evaluate business processes and company strategy. The interesting thing about management accounting is that it is rare to find an individual within a company with the title of “management accountant.” Often many individuals function as accountants within the organization, but these individuals…

Words 1007 - Pages 5

Managerial Accounting Essays

Chapter 4: Research and Application 1. The income statements differ in a few ways, first of all on page 33 the common size income statement is used and on page 50 it is not broken down the same way. Also on page 50 does not break down the costs as both variable and fixed. The income statement on page 33 also shows additional information, changes in line items from the years 2003 and 2004. The selling, general and administrative expenses appear to be reclassified as variable selling cost in the…

Words 512 - Pages 3