Managerial Accounting Essay Example for Free

Managerial Accounting EssayExplain the distinguishing features of managerial account statement. Identify the three broad functions of worry. Define the three classes of manufacturing be. Distinguish between product and diaphragm costs. Explain the difference between a merchandising and a manufacturing income statement. Indicate how cost of goods manufactured is determined. Explain the difference between a merchandising and a manufacturing balance sheet. Identify trends in managerial chronicle.Managerial accounting is a field of accounting that provides economic and financial information for managers and former(a) internal users. (b) bloody shame is incorrect. Managerial accounting applies to all types of businessesservice, merchandising, and manufacturing. (a) Financial accounting is concerned generally with external users such as stockholders, creditors, and regulators. In contrast, managerial accounting is concerned primarily with internal users such as officers and mana gers. Financial statements argon the end product of financial accounting. The statements ar prep ard quarterly and annually.In managerial accounting, internal reports may be prepared as frequently as needed. The purpose of financial accounting is to provide general-purpose information for all users. The purpose of managerial accounting is to provide special-purpose information for specific decisions. 2. (b) (c) 3. Differences in the content of the reports are as follows Financial Pertains to business as a whole and is highly aggregated. Limited to double-entry accounting and cost data. Generally accepted accounting principles. Managerial Pertains to subunits of the business and may be very detailed.Extends beyond double-entry accounting system to any relevant data. standard is relevance to decisions. In financial accounting, financial statements are verified annually through an independent analyse by certified public accountants. There are no independent audits of internal reports issued by managerial accountants. 4. Budgets are prepared by companies to provide future direction. Because the budget is also used as an evaluation tool, some managers try to game the budgeting process by underestimating their divisions predicted performance so that it will be easier to meet their performance targets.On the other hand, if the budget is set at unattainable levels, managers sometimes take unethical actions to meet targets to receive higher compensation or in some cases to sustainment their jobs. Karen should know that the management of an organization performs three broad functions (1) Planning requires management to look ahead and to establish objectives. (2) Directing involves coordinating the diverse activities and human resources of a company to produce a smooth-running operation. (3) Controlling is the process of keeping the companys activities on track. Disagree.Decision making is not a separate management function. Rather, decision making involves th e exercise of good judgment in performing the three management functions explained in the answer to question five above. Employees with line positions are directly involved in the companys primary revenue generating operating activities. Examples would include plant managers and supervisors, and the vice president of operations. In contrast, employees with staff positions are not directly involved in revenuegenerating operating activities, but rather serve in a support capacity to line employees.Examples include employees in finance, legal, and human resources. 5. 6. 7. 1-4 Copyright 2010 John Wiley Sons, Inc. Weygandt, Managerial Accounting, 5/e, Solutions Manual (For Instructor Use Only) Questions Chapter 1 (Continued) 8. CEOs and CFOs must now certify that financial statements give a fair presentation of the companys operating results and its financial condition and that the company maintains an adequate system of internal controls. In addition, the composition of the board of directors and audit committees receives more scrutiny, and penalties for misconduct have increased.The differences between income statements are in the computation of the cost of goods sold as follows Manufacturing company Merchandising company 10. Beginning terminate goods inventory plus cost of goods manufactured damaging ending finished goods inventory = cost of goods sold. Beginning merchandise inventory plus cost of goods purchased minus ending merchandise inventory = cost of goods sold. 9. The difference in balance sheets pertains to the presentation of inventories in the current asset section. In a merchandising company, unaccompanied merchandise inventory is shown.In a manufacturing company, three inventory accounts are shown finished goods, work in process, and raw materials. Manufacturing costs are classified as either direct materials, direct labor, or manufacturing overhead. No, Matt is not correct. The distinction between direct and indirect materials is based on two criteria (1) physical friendship and (2) the convenience of making the physical association. Materials which can not be easily associated with the finished product are considered indirect materials. Product costs, or inventoriable costs, are costs that are a necessary and integral part of producing the finished product.