Part A
Question 1:
Concept of management accounting:
“Management Accounting is the utilization of proper strategies and ideas in preparing chronicled and anticipated financial information of a substance to help administration in setting up arrangements for sensible monetary goals really taking shape of judicious choices with a view towards these destinations."
Management accounting helps organizations to generate and preserve value:
Management accounting provides information for three major purposes as follow:
1. External reporting:
These reports are utilized financial specialists, leasers, government experts, and other outside gatherings.
2. Routine internal reporting:
These reports which are intermittently created are utilized by
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otal
Sales price per unit 60 180 200
(-) Variable Cost per unit (30) (60) (140) contribution 30 120 60 sales mix 3 2 1 6
Weight contribution 90 240 60 390
Weighted Average Contribution per unit = Total weighted contribution _______________________ Total weights
= 390 ________ = $ 65per unit 6
Break Even Point
(Units) = Fixed Costs _______________________ Weighted Average Contribution per unit
= 162,500 __________ = 2500 units 65
Proof:
Information A B C Total
Sales units
A – 2500 x 3/6
B – 2500 x 2/6
C – 2500 x 1/6 1250 833 417 2500
Sales 75,000 149,940 83,400 308340
Less: Variable Cost 37,500 49,980 58,380 145860
Contribution 453,750 99,960 25,020 162480
Less: Fixed Cost 162500
Operating Income 0 (approx.)
Question 3 (ii):
Break Even Point
(Units) = Fixed Costs + Target Profit ____________________________ Weighted Average Contribution per unit = 162,500 + 227,500 _________________ = 6,000 units 65
Break Even Point ($)
Information A B C Total
Sales units
A – 6,000 x3/6
B –6,000 x 2/6
C –6,000 x 1/6 3000 2000 1000 6,000
Sales 180,000 360,000 200,000 740,000
Question 4:
Exiting situation:
Information/Products A B C
Sales Units 1500 1000 500 3000
The focus of EEC’s investment of the purchasing of the supplier is to cut down on
Agenda – Submit term projects to TURNITIN ASAP – Assignment #2 due April 1st 1159pm • List the coauthor’s name in the subject line. • Teaching Evaluation • Transfer pricing (cont.) – Stanco Inc. • Review chapters 11 and 12 & the practice final – Practice Q1 and Q2 • Review chapters 8 and 9 and the practice final – Practice Q3 and Q4 ACTG 2020
a service department’s costs have been allocated, costs are not reallocated back to it under
Management accounting is for commercial finance, analyzing past performance and projecting future results aiding in the commercial decision-making. This department defines and measures key targets needed to achieve for McDonald’s business strategy to be successful (McDonald’s Corporation, 2008).
Managerial accounting is defined as the activities carried out in a firm to provide its managers and other employees with financial and related information to help them make strategic, organizational, and operational decisions.
Managerial accounting underlines on future choices and it is not an obligatory practice. It gives data to the association's insiders in connection with performance assessment, inspiration, course and control. The opportuneness of report is a noteworthy prerequisite and accentuation are set on the significance of things in choice making (Needles, Powers and Crosson, 2010). Administrative bookkeeping gives a report on clients, items, workers and divisions. Also, it is not an absolute necessity for administrative bookkeeping to take the proper accounting rules.
The company should probably use direct labor-hours as the activity base, since the fit of the regression line to the data is much tighter than it is with tons mined. The R2 for the regression using direct labor-hours as the activity base is twice as large as for the regression using tons mined as the activity base. However, managers should look more closely at the costs and try to determine why utilities costs are more closely tied to direct labor-hours than to the number of tons mined.
Symmetric multiprocessing sees all processors as reciprocals, and I/O can be arranged on any CPU. Asymmetric multiprocessing has one master CPU and whatever is left of are slaves.
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
Feedback: Management accounting is the preparation and use of accounting information systems to achieve the organization's objectives by supporting decision makers inside the enterprise. LO 4
3. Managerial Accounting deals with procuring of data for the organisation's management i.e. to serve the internal users with necessary accounting information to carry out the management tasks of planning, organising, actualising and controlling. " Management Accounting is the presentation of accounting Information in such a way as to assist management in creation of policy and in the day to day operations of an undertaking". 4. Financial Management deals with the process adopted by an organisation for taking financial decisions through analysing and interpretation of financial data for meeting the organisations objectives.
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
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.
According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non management groups such as shareholders, cr->ors, regulatory agencies and tax authorities" (CIMA Official Terminology)
By: Charn Gek Cheng, Chiang Soo Ling, Kummar Sokali Muthu Mogan, Lee Siew Fen Samantha