Managerial Accounting

Accounting is a business discipline that allows companies to record, analyze, and retrieve critical financial information that can be used to determine a company 's financial status. Its purpose is to help people understand what is going on financially within an organization provide reports and insights needed to make sound financial decisions.

Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities besides preparing financial statements and recording business transactions. These activities include computing costs and efficiency gains from new technologies, participating in strategies for mergers and acquisitions, quality management, developing and using information systems to track financial

|Selling Price per|Year 1 Sales Units |Year 1 Year End Stock units |Year 2 Unit Sales |Sales Revenue Year 1 |

“Ending Inventory” = “Beginning Inventory” ($22,000) + “Purchases” ($30,000) – “Cost of Goods sold” ($24,000) = $52,000 - $24,000 = $28,000

Assume that Pittman Company decides to continue selling through agents and pays the 20% commissions rate. Determine the volume of the sales that would be required to generate the same net income as contained in the budgeted income.

Company operates in the Industrial Sector – Services, and Industry – Regional Airlines. According to the Standard Industrial Classification System (SIC), company belongs to the industry group 451: Air

COGS (Cost of Goods Sold) is an “inventoriable cost” ( recorded in the Balance Sheet as inventory and expensed (Income Statement) when goods are sold

Accounting is very important as all companies as well as individuals must keep track of their business and financial affairs, so to get higher profits. In addition, accounting is necessary to obtain legal information. We could say that, at a personal level, accounting is the financial tool that helps us go throughout our financial plan, showing us where we are financially at each period of time, and advising us in order to make the best economic and financial decisions.

Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a commission of 15% of selling price for all item sold.

Since there is no work in process at year-end, all amounts in the Work-in-Process account must be transferred to Finished-Goods Inventory. Thus:

Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities besides preparing financial statements and recording business transactions, including computing costs and efficiency gains from new technologies, participating in strategies for mergers and acquisitions, quality management, developing and using information systems to track financial performance, tax strategy, and health care benefits management. They perform these vital functions by offering an increasingly wide array of business and accounting services to their clients, in order to provide information to them.

Break-even point in total sales dollars =(Fixed expenses)/(CM ratios) = (400,000)/(0.5466) = 732,000 $ (Rounded)

Managerial accounting is an important task for an organization that is considering expansion because it focuses on providing executives, managers, and investors with the information required to approve the expansion. The fact that financial information is available whenever necessary is the biggest difference between managerial and financial accounting, which produces reports at a set interval. Accounting departments provide financial data used in performance reports that are designed specifically for an individual executive, manager, or department. The detailed performance report basically provides a comparison between budgets and actual results for a specific time period, which enables executives, managers, or departments to identify problem areas. Although financial and managerial accountants have some similarities it is important that different personnel are assigned to fulfill each role within an organization because of the glaring differences of the two positions.

Accounting is one of the most important business resources. It helps to organise, gather and manage numerical data of a business. Most businesses are interested in making a profit, therefore, it is vital for a business to control its costs by setting budgets so that this helps to ensure there is a sufficient of cash flow within the business. The role of accounting does not necessary be dealing with money, it could help and produce statistical data to assist decisions making of a business.

Management accounting is the process of producing management reports and accounts which provide accurate and timely information for the use of internal parties within an organisation, such as departmental managers or chief executive officers. The information collected and produced include financial aspects such as amount of cash in hand, capital, liabilities, recent sales revenues, cost of production and also non-financial aspects such as employee’s performances or efficiency of production. In this era of globalisation and increased competition, firms and companies are starting to look beyond management accounting to run a business, that is by forming strategies. Strategy can be defined by an idea to ‘produce long term plans for the