1. What is managerial accounting? How is it different from other areas of accounting? Explain the

The correct answer is D, $700,000. The nonmanufacturing costs are the costs incurred to make the inventory are crossed out below. Notice that purchasing raw material is not the same thing as incurring a cost. You have simply traded one asset for another. You have not yet used it to make a product, or provide a service.

Overhead costs need to be accounted for this way we can understand just how much cost goes into producing each unit. There are other cost factors that contribute to the product aside from labor and material. Since the projected and the actual sales volumes do not align Kelly should be concerned with the other

Acquisition of the automated milling machine will increase the apparent costs of all jobs—not just those that use the new facility. This is because the company uses a plantwide overhead rate. If there were a different overhead rate for each department, this would not happen.

“Auerbach Enterprises uses machine hours as the cost driver to assign overhead costs to the air conditioners. The company has used a company-wide predetermined overhead rate in past years, but the new controller, Bennie Leon, is considering the use of departmental overhead rates beginning with the next year. “(Schneider, 2012). One product is affected more than the other by use of departmental rates rather than companywide rate.

Wilkerson employs a Normal Cost System, which means that they use predetermined overhead rates along with actual costs for direct material and direct labor. Normal costing systems are appropriate when overhead costs are a relatively small percentage of total manufacturing costs and product diversity is limited. For Wilkerson, normal costing does not make sense. Overhead costs make up over 50 percent of total manufacturing costs and their product offering is relatively more diverse. This indicates that the current accounting system in place may be distorting costs significantly. Supporting data:

Hannon Company expects to produce 1,200,000 units of Product XX in 2010. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $6, and overhead $8. Budgeted fixed manufacturing costs per unit for depreciation are $2 and for supervision are $1. Complete the flexible manufacturing budget for the relevant range value using 20,000 unit increments.

Financial management is important to the organization because it provides pertinent finance and accounting information to help managers accomplish the purpose of the organization. Financial accounting provides accounting information to external users. On the other hand, managerial accounting is more for managers (internal users) to use for things like planning, budgeting, etc. The definition of finance has changed over the years, but it’s used to ultimately evaluate previous decisions and make assessments for future decisions of the organization.

Compare and contrast financial accounting and managerial accounting by answering the following questions in the matrix provided. Cite any sources you use in accordance with APA guidelines.

1. Use the Overhead Cost Activity Analysis in Exhibit 5 and other data on manufacturing

The current method of apportioning production overheads based on direct labour hours can be described as a traditional approach to product costing. In a manufacturing company’s financial statements, each item produced must be allocated some of the production overheads to make the statements compliant. Sometimes the individual costs of these items can be calculated incorrectly based on overall production overhead and the system of allocating in place, however the overall financial statement can still be accurate. This traditional method of allocating the production

The first impression of the course managerial accounting for managers was that it would involve learning how to manage operations of a firm, especially in relation to its financial records and activities to ensure efficient and successful operation of a firm. I expected to learn how to deal with the final financial records and using them to perform an analysis of the records which will help to make informed decisions. It would also involve learning how to deal with the accounting records to make effective budget plans in considerations of resources available. My expectations of the course

The primary difference between financial and managerial accounting is that financial accounting is used for external members of the company; they do not control or run the businesses’ operations. An example of external members would be customers and shareholders of the business. On the other hand, managerial accounting is used for internal members in the company such as managers and officers. The internal members use managerial accounting to increase efficiency and effectiveness within their company. According to accounting4management.com, financial accounting and managerial accounting have several differences, but they both depend on the same data.

Generally, the accounting professionals calling in the United States as well as in the whole world seemed to be focused on the readiness and examining of money related articulations. Many people consider Certified Public Accountants (CPAs) and different experts of accounting while saying financial accounting. In any case, in different parts of the world, management accounting order is a division of the accounting field (Sahi and Dua 2012). Management accounting and financial accounting are two distinct callings in such locales. Administration accounting, as a sub control, manages money related and non-monetary data to bolster a scope of administrative choices. Then again, money related accounting focuses on monetary information just to bolster both loan bosses' and financial specialists' choices on capital allotment (Kinney and Raiborn 2008). Management accounting fundamentally concentrates on enhancing business execution yet not guaranteeing that the business complies with the set measures. From this perspective, it is evident that monetary accounting dominates management

According to Will S, Ray H, & Eric E.N. (2009), management accounting is a branch of accounting that is concerned with providing information to managers who direct and control the firm’s operations. Management directing function seeks to effectively use both the human and raw material wealth of a firm to achieve organizational set objectives on routine basis. Controlling function is the art of tele-guarding the activities of the organization to consistently fall in line with set objectives. Management accounting achieves this function through effective budgeting.

Accounting can be defined in a number of ways, but I chose the book definition, which is; Accounting is an information system that provides reports to stakeholders about the economic activities and condition of business. The person in charge of accounting is called the accountant. The accountant is typically required to follow a set of rules and regulations. These rules and regulations are called the General Accepted Accounting Principles. Throughout these next few paragraphs, I will be giving you the history and evolution of accounting, and I will be explaining who the stakeholders are and what type of information they require, and I will be explaining the role of accounting in business. There will be many examples and type of business