Management Accounting Paper

In: Business and Management

Submitted By phuongvy
Words 2814
Pages 12
Jan Turyna
MANAGERIAL ACCOUNTING – CASE ANALYSES

CASE 1 Management Board of Furniture Company X is considering one-year contract for producing office desks. Accounting Department has prepared preliminary list of contract costs and revenues:
|Specification |Amount |
|1. Direct material costs, including: | |
|- plywood (stock-carried in company’s store) |20000 |
|- varnish (ordered) |9000 |
|- metal connectors (still not ordered) |1500 |
|2. Direct labor costs |20000 |
|3. Indirect labor costs (salary of technical supervisor) |5000 |
|4. Technical equipment, including: | |
|- rented one (200/per week) |10400 |
|- company’s own equipment (one year’s depreciation) |10000 |
|5. General overhead costs |20000 |
|6. One year’s planned revenue (guaranteed by contractor) |50000 |

Additional information:

1. The…...

Similar Documents

Accounting Paper

...RUNNING HEAD: ACCOUNTING PRACTICES AND ENTRIES PAPER Cheryl Abdur-Rahman Accounting Practices and Entries Prof: Agnes Samaniego February 13, 2010 Accounting practices and principles are at the heart of financial management (McLean, 2003). Every organization needs to have a viable accounting system in place. It is up to the organization to find the course of financial action that maximizes the well –being of the organization (McLean, 2003). Accrual principle requires that revenues be recorded in the period in which the associated service is performed, and that expenses be recorded in the period in which they are incurred regardless of whether or not cash has changed hands (McLean, 2003). On the other hand cash flow requires the investor’s initial contribution which is the same as under accrual accounting, but now is recognized as a source of cash (McLean 2003). Under cash flow accounting, a measure of a company’s financial health, equals cash receipt minus cash payments over a given period of time, or equivalently net profit plus amount charged off for depreciation, and depletion (Investor worlds.com, 2011). Fund accounting has a different concept, in which an accounting system is only used for governmental entities, including hospitals, clinics, and public health departments. Fund accountings are appropriation based, depending on appropriation from the public purse for their operating and capital funds (McLean 2003). To......

Words: 882 - Pages: 4

Accounting Paper

...training), and not from its lab equipment or pill production facilities, Wal-Mart’s incredible competitiveness derives from unique organizational processes, such as those shifting inventory management to suppliers, rather than from bricks and mortar.” As the new intangible economy has continued to grow, so has the concern that the current system of financial reporting is incapable of providing the information its users require to assign fair value to a firm. Much research has been conducted analyzing the problems inherent in the current state of financial reporting and many solutions have been proposed. As this paper intends to display, the level of information provided to the users of financial reports regarding intangibles acquired in mergers and acquisitions has improved significantly over the last decade, however little if any progress has been made as far as improving the accounting methodology regarding internally developed intangibles. This paper aims to analyze the weakness in the current system of financial reporting in relation to intangible assets, recount the efforts to improve these weaknesses, and finally to suggest further actions that could be taken to improve the quality of accounting. Weaknesses in Financial Reporting Before we can consider the weaknesses in the accounting system we must first understand the characteristics of intangible assets as well as the processes involved in their development. The key word to consider when discussing......

Words: 2420 - Pages: 10

Accounting Paper

...numbers, the rapid and accurate flow of information is vital to accountants. This is where AIS or Accounting Information Systems come in, this practice was originally handled “in house” by most businesses, but as technology changed and businesses became more web based, software packages from developers such as Microsoft and Oracle are sold to assist businesses with their accounting needs. AIS was developed for the collection, storage, and processing of financial and accounting data. In most organizations A.I.S. are made up of interrelated components that interact to achieve a common goal. Throughout this paper we will look at the history of AIS, why the A.I.S. is important to corporate America, and what future developments are necessary to move ahead with the system History of the AIS In order to understand Accounting Information Systems better it is important to break down what the term really means and why it is so important in modern day accounting. The development of AIS dates all the way back to Babylon, in the year 3600BCE, this is when the oldest known record of any business occurred. It is believed that AIS were used in many other countries before making it’s way to the U.S. Countries such as Greece, China, and Rome are all believed to have used this system during trade activities. A.I.S. were first comprised of someone jotting down notes with a pencil and paper and now years later it has developed into extensive software programs that take human error out......

Words: 2098 - Pages: 9

Management Accounting

...Handbook of Management Accounting Research Volume 3 Edited by CHRISTOPHER S. CHAPMAN Imperial College London, UK ANTHONY G. HOPWOOD University of Oxford, UK MICHAEL D. SHIELDS Michigan State University, USA AMSTERDAM – BOSTON – HEIDELBERG – LONDON – NEW YORK – OXFORD PARIS – SAN DIEGO – SAN FRANCISCO – SINGAPORE – SYDNEY – TOKYO Elsevier The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, UK First edition 2009 Copyright © 2009 Elsevier Ltd. All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone ( 44) (0) 1865 843830; fax ( 44) (0) 1865 853333; email: permissions@elsevier.com. Alternatively visit the Science and Technology Books website at www.elsevierdirect.com/rights for further information Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record......

Words: 187223 - Pages: 749

Management Accounting

...11/5/2007 Origin Activity Based Costing, or ABC for short, has been in use since the early 20th century. As the manufacturing industry became more complex, managers needed a way to keep a closer watch on manufacturing costs within the company. This in turn allowed them to more appropriately price their products, making them more competitive. (DirectoryM) By the 1980’s ABC had been in use for nearly 80 years, though it had yet to be truly identified and defined as a solid business practice. Although in 1987, Robert Kaplan and W. Bruns first defined ABC in their book, Accounting and Management: A Field Study Perspective, it was in 1988 that Robin Cooper and Kaplan worked together on a series of articles for the Harvard Business Review that better defined the practice of ABC. They also recognized the reasons it was more beneficial to business than traditional cost accounting methods. (Wikipedia.org) General Purpose The purpose of ABC is to more accurately define the overhead and/or indirect costs associated with the manufacturing process and apply those costs to the product. (Answers.com) In the past, cost accountants would add a percentage of expenses into direct costs as an allowance for indirect costs. (Wikipedia.org) With the advent of ABC, expenses are now more accurately defined and added to product lines appropriately. Although the process to define these expenses is sometimes tedious and costly, for some companies it provides an......

Words: 1203 - Pages: 5

Management & Accounting

...Fundamentals Pilot Paper – Knowledge Module Management Accounting Pilot Paper from December 2011 onwards Time allowed: 2 hours ALL 50 questions are compulsory and MUST be attempted. Formulae Sheet, Present Value and Annuity Tables are on pages 16, 17 and 18 Do NOT open this paper until instructed by the supervisor. This question paper must not be removed from the examination hall. The Association of Chartered Certified Accountants Paper F2 ALL 50 questions are compulsory and MUST be attempted Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to each multiple choice question. Each question is worth 2 marks. 1 A manufacturing company benchmarks the performance of its accounts receivable department with that of a leading credit card company. What type of benchmarking is the company using? A B C D Internal benchmarking Competitive benchmarking Functional benchmarking Strategic benchmarking 2 Which of the following BEST describes target costing? A B C D Setting Setting Setting Setting a a a a cost by subtracting a desired profit margin from a competitive market price price by adding a desired profit margin to a production cost cost for the use in the calculation of variances selling price for the company to aim for in the long run 3 Information relating to two processes (F and G) was as follows: Process F G Normal loss as % of input 8 5 Input (litres) 65,000 37,500 Output (litres) 58,900...

Words: 5790 - Pages: 24

Term Paper on Management Accounting

...Legal Department. Everyone at Dell has an obligation to protect our company’s interests. If you see something that doesn’t seem ethical or right, please speak up. It’s your responsibility as a member of our global team to conduct yourself with the highest level of integrity and to alert others if you have questions or concerns. At Dell, winning with integrity is not optional. It’s the way we work as a company, and there are no exceptions to this expectation. Thank you for following our Code, living our values and fulfilling our purpose. Michael S. Dell Chairman and CEO Contents Introduction 1.1 1.2 1.3 About our Code of Conduct Dell’s ethical principles Additional responsibilities for leaders 3.8 3.9 3.10 3.11 Effective records management Responsible travel and entertainment Speaking on Dell’s behalf Contracting authority Our commitment to our people 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 Raising issues and concerns Investigating and addressing concerns Diversity, equal opportunity and respect Compensating team members fairly and lawfully Preventing harassment Ensuring a non-violent workplace Maintaining a drug-free and alcohol-free workplace Respecting team member privacy Communicating responsibly Workplace health and safety Our commitment to our customers 4.1 4.2 4.3 4.4 Providing safe and dependable products Keeping our promises to our customers Protecting customer personal data and privacy Compliance with government contracting requirements Our......

Words: 15436 - Pages: 62

Accounting Paper

...How General Motors Poor Enterprise Risk Management & Managerial Decisions in the 21st Century has Effected Where They Stand Today Brittany M. Mendez North Greenville University Abstract This paper discusses the rise and fall of General Motors during the 21st century and documents many different managerial decisions that led to where the company is today. It also analyzes the enterprise risk management plan that General Motors was famous for. They were known for being a company that successfully implemented an ERM that was linked to its success after many failures. I will examine how an ERM was the framework to coming up with a plan of action to identify and mitigate risks, but ultimately it was up to supervisors to make the managerial decisions that now General Motors must face the consequences for. Keywords: General Motors, Enterprise Risk Management How General Motors Poor Enterprise Risk Management & Managerial Decisions in the 21st Century has Effected Where They Stand Today General Motors was once regarded as one of the best managed and most successful firms in the world, but between 1980 and 2009 its share of the U.S. market fell from 62.6% to 19.8%, and in 2009 the firm went bankrupt (Helper & Henderson, 2014). In this paper I will examine the decisions that General Motors made in regards to their Enterprise Risk Management Plan and how management decisions determined the fate of where General Motors is today. We all know General Motors......

Words: 5435 - Pages: 22

Accounting Paper

...The Role of Accounting on Business and Our Society Strayer University Professor Powell August 27, 2014  The Role of Accounting on Business and Our Society Anyone considering accounting needs to assess whether this career fits his or her interests, abilities, and aspirations. There are certain qualities and qualifications that a person should consider before making a commitment to a particular career field. Selecting a career can take a lot of time, and many people do not choose until they are adults. Contributing to the difficulty in choosing a career is the vast number of vocations from which to choose. The field of accounting alone covers dozens of types of accountants and dozens of jobs. In trying to decide whether accounting is an appropriate career choice, a person should talk with bookkeepers and accountants that have years of experience. Ask questions about their daily work requirements, their likes and dislikes about accounting, and how they became interested in the profession. Questions such as these can give a person insight into the profession and help in considering accounting as a career. Accounting is a system used to provide financial information about a business or person. Accountants prepare and analyze financial records for individuals, companies, governments, or other organizations. Accounting is a basic need for every business, and the term business has been broadened to mean any operation that deals with money. That includes......

Words: 2287 - Pages: 10

Management Accounting

...------------------------------------------------- Management accounting From Wikipedia, the free encyclopedia | This article contains wording that promotes the subject in a subjective manner without imparting real information.Please remove or replace such wording and instead of making proclamations about a subject's importance, use facts and attribution to demonstrate that importance. (February 2012) | Accounting | | * Historical cost accounting * Constant purchasing power accounting * Management accounting * Tax accounting | Major types of accounting[show] | Auditing[show] | People and organizations[show] | Development[show] |  Business portal | * v * t * e | In Management accounting or managerial accounting, managers use the provisions of accounting information in order to better inform themselves before they decide matters within their organizations, which aids their management and performance of control functions. Contents   [hide]  * 1 Definition * 2 Scope, practice, and application * 3 Differences between financial accountancy and management accounting * 4 Traditional vs. innovative practices * 5 Role within a corporation * 6 Specific methodologies * 6.1 Activity-based costing (ABC) * 6.2 Grenzplankostenrechnung (GPK) * 6.3 Lean accounting (accounting for lean enterprise) * 6.4 Resource consumption accounting (RCA) * 6.5 Throughput accounting * 6.6 Transfer......

Words: 3095 - Pages: 13

Management Accounting

...of Management Accounting Research Edited by Christopher S. Chapman, Anthony G. Hopwood and Michael D. Shields r 2007 Elsevier Ltd. All rights reserved Management Accounting and Operations Management: Understanding the Challenges from Integrated Manufacturing Allan Hansen and Jan Mouritsen Copenhagen Business School, Denmark Abstract: Innovations in operations management, like just-in-time, total quality management, automation, have produced a new manufacturing paradigm that challenges management accounting design and practices. The new manufacturing paradigm, which we conceptualise as integrated manufacturing, focuses upon the lateral flow of products and services, and thereby confronts management accounting ideals of hierarchical flows of information for planning and control. In this chapter, we take a closer look at management accounting research and the responses that have been made to the challenge from the new operational practices. We examine the extent to which changes in management accounting practices are observed, and the way in which design changes are recommended within organisations committed to the new manufacturing paradigm. Furthermore, we reflect upon the role of accounting as a management tool in integrated manufacturing, and on possible future research questions, so as to enrich our knowledge of the management accounting/operations management interface. Introduction Innovations in operations management (OM) have challenged management......

Words: 18027 - Pages: 73

Management Accounting

... MANAGEMENT ACCOUNTING Information for Decision-Making and Strategy Execution S I X T H E D I T I O N Anthony A. Atkinson University of Waterloo Robert S. Kaplan Harvard University Ella Mae Matsumura University of Wisconsin–Madison S. Mark Young University of Southern California Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City S~ Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo ao AVP/Executive Editor: Stephanie Wall Editorial Director: Sally Yagan Editor in Chief: Donna Battista Director of Editorial Services: Ashley Santora Editorial Project Manager: Christina Rumbaugh Editorial Assistant: Brian Reilly Director of Marketing: Patrice Jones Marketing Assistant: Ian Gold Senior Managing Editor, Production: Cynthia Zonneveld Production Editor: Carol O’Rourke Text Permissions Coordinator: Tracy Metivier Senior Operations Specialist: Diane Peirano Art Director: Anthony Gemellaro Cover Design: Anthony Gemmellaro Cover Illustration/Photo: © Image Source/Corbis Composition/Full-Service Project Management: S4Carlisle Publishing Services/Lynn Steines Printer/Binder: Edwards Brothers Cover printer: Lehigh-Phoenix Color/Hagerstown Typeface: 10/12 Palatino Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text. Copyright © 2012,...

Words: 255160 - Pages: 1021

Management Accounting

...labour, overheads and sales variance), practical applications Budgeting and budgetary control mechanism Activity based costing, Responsibility Accounting Target costing Objective Objective of this course is to help student understand: 1. The essence of management accounting-effective use of the accounting information for planning, control and business decision making. 2. To use cost accounting as a managerial tool for business strategy and implementation. 3. To understand analyse the costing tools and their business application for enhancing revenue and profitability of a firm,. 4. To analyse various aspects of costing such as, marginal costing, absorption costing, allocation of costs, standard costing and variance analysis, activity based costing, target costing etc. 5. To understand the process of decision making, planning and budgeting in a business organisation. Pedagogy Lectures Discussions on case studies Term Projects and presentations Discussion and presentation on published research papers on related topics. Text book: Management Accounting: Paresh Shah, OXFORD UNIVERSITY Press, Edition, Eighth impression 2012. Reference Books: 1. Managerial Accounting, by James Jiambalvo, third edition, pub. Wiley 2. Management Accounting, M Y Khan & P K Jain, Pub. Tata McGraw-Hill 3. Managerial Accounting, Ronald W Hilton/ G Ramesh Pub.Tata McGraw Evaluation and Weightage (Total 100 Marks) Class Quiz : 10 Marks Class Assignment : 10......

Words: 601 - Pages: 3

Management Accounting

...MANAGEMENT ACCOUNTING Study Material Prepared By INSTITUTE OF COST AND WORKS ACCOUNTANTS OF INDIA for Junior Accounts Officer(Civil) Examination Conducted By CONTROLLER GENERAL OF ACCOUNTS 1 BASICS OF COST ACCOUNTING 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 ♦ ♦ Evolution of Cost Accounting, Cost Concepts and Cost Classification Introduction Evolution of Cost Accounting Financial Accounting and Cost Accounting Management Accounting Financial, Cost and Management Accounting Cost Concept and Cost Object Cost Management Cost Classification Methods of Costing Techniques of Costing Specific Cost Systems Cost Department and its relationship with other Departments Installation of Costing System Specimen Questions with Answers Test Yourself Page . No 1 1 2 3 4 .5 6 7 10 12 13 14 16 17 18 20 1.0 EVOLUTION OF COST ACCOUNTING, COST CONCEPTS AND COST CLASSIFICATION 1.1 INTRODUCTION Traditionally, cost accounting is considered as the technique and process of ascertaining costs of a given thing. In sixties, the definition of cost accounting was modified as ‘the application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control and ascertainment of profitability of goods, or services’. It includes the presentation of information derived therefrom for the purpose of managerial decision making. It clearly emphasises the importance of cost accountancy achieved during the period by using cost concepts in...

Words: 102642 - Pages: 411

Management Accounting

...{ { II Semester Paper: Examination \a "a sa sa { Management IIBM Institute of Business ExaminationPaPer Accounting Management Section A: Objective Type (30 marks) o . . questions shortnotetypequestions' & ofmultiple choice consists This section Answerall thequestions. carriesI markeach& PartTwo Partoneouestion MM.100 Ea Ea \a \a \o \ia Part One:Multiple choices: be revenue(SR) Rs 8 thenthe vAy' ratio is given I . If the variablecost(vc) be Rs 5 andthe sales by: a. 1.6 b . 3 c. 40 d. 0.625 level: 2. Re-order * deliverytime) a. Minimumlevel+ (normalusage average + leadtime) * safetystock b. (Daily usage + stock c. (Daily usage leadtime) + average - minimumlevel)i2 stocklevel d. (Average 3. Acid testratio is the ratiobetween: liabilities and a. Quickassets current debtors average and b. Net creditsales inventory average c. Costofgoodssoldand d. CostofgoodsonlY AS-17 is a: standards account 4. In select partydisclosure a. Related reporting b. Segment c. DiscontinuingoPeration rePorting financial d. Interim 5. Ledger is: a. A kind of payment b. A kind of strategy are c. A bookin whichbankaccounts kept d. lt is a receiptofselling \a Y \a \a \a \a \ \a ! It F. Fr t:-, l - H 23 Manag,ement llBM lnstitute Business of a \a \a { Examination Paper: Semester II 6. Which-of.the following industries doesnot useprocsss costing? a. Oil refineries b. Distilleribs Sugar o . Chemical Aircraft manufacturing 7. Thedemand curveis......

Words: 505 - Pages: 3