Managerial Accounting:
Manufacturing Overhead:
The costs allocated to a cost object can be considered as fixed or variable as well as direct or indirect costs. There are two types of costing systems that are used by management accountants i.e. job-costing systems and process-costing systems. While job-costing systems mount up and track costs differently for every product or service, the process-costing systems are basically used by companies manufacturing huge quantities of similar or identical products. Notably, companies usually classify manufacturing costs into three various categories i.e. manufacturing overhead, direct materials, and direct labor ("Systems Design: Job-Order Costing," n.d.). Even though direct materials and direct labor costs are traced to jobs, manufacturing overhead costs are not traced to jobs in similar ways. However, manufacturing overhead costs are included with direct materials and direct labor on the job cost sheet since it is also a product cost. Assigning these costs to overhead units of product is a relatively difficult process because it is an indirect cost, it contains several different items, and it tends to remain seemingly constant because of the presence of fixed costs. Therefore, the only way to allocate manufacturing overhead costs is through an allocation process because of this difficulty.
Absorption Costs:
Absorption costing is a costing system in which all costs of manufacturing are regarded as product costs regardless of whether they are fixed or variable. This system allocates part of fixed manufacturing overhead cost to every product unit together with the variable manufacturing cost. Under absorption costing, if fixed manufacturing overhead costs are released from inventory, the fixed manufacturing costs of the present period do not appear on the income statement as part of the cost of products sold. The costs are instead deferred to a future period and included in the balance sheet as a segment of the inventory account ("Absorption Costing or Full...
Managerial Accounting Elkay is a manufacturer of sinks. The company has three plants, serving different markets. The Ogden plant is high-volume, low-margin production. The company has new technology that makes it an innovator in efficiency. The Lumberton plant focuses on high margin items. Broadview is for commercial, institutional and specialty products. The company's information provides feedback about profits that indicates one customer type provides all of the profits, and the other
Accounting Concepts and Practice Income Statement and Balance Sheet Smith Company Income Statement For the Year Ended 31st Dec 2012 Revenue $406,000 Less cost of goods sold $234,000 Gross profit $172,000 Less: Expenses Depreciation expense $24,350 Insurance $1,400 Marketing $4,500 Property taxes $8,900 Rent $18,000 Utilities $6,700 Salaries Total expenses ($131,350) Net Income (Balance C/D) $40,650 Computations Retained Earnings: Difference between debit and credit balances. $760,850 -- $718,000 = $42,850 Retained earnings to be transferred to the balance sheet: Income statement balance b/f balance c/d $40,650 $40,650 Add: retained earnings $42,850 Retained earnings balance c/d $83,500 Smith Company Balance Sheet For the Year Ended 31st Dec 2012 Non-Current Assets Equipment $316,000 Current Assets Accounts receivable $24,500 Cash $30,000 Inventory $25,000 Total current
Managerial and Financial Accounting Case Managerial Accounting - Variable Costing Managerial accounting emphasizes short-term profit analysis, income statement important. Consequently, 'll examine discuss income statements case. Managerial and Financial Accounting Financial and managerial accounting basic difference comes on the uses. While, financial accounts are prepared for use by external parties, managerial accounts are prepared for use internally. The process of preparing the accounts in both financial and managerial accounting use similar source for
Managerial Acctg The weighted average cost of capital is as follows: In a net present value analysis, the cost of capital is often used as the discount rate. A net present value analysis seeks to reflect the value today of cash flows in the future. In order to do that, the future cash flows must be discounted back to present day dollars. There are a number of different ways to obtain the
Financial Accounting Accounting Concepts Financial Statements (Regulatory oversight) The rapid failure and bankruptcy of Enron has prompted severe criticism of the nation's financial reporting and auditing systems, which are fundamental to maintaining investor confidence in U.S. capital markets; there are four areas in which the Enron failure revealed serious problems: corporate governance, the independent audit of financial statements, oversight of the accounting profession, and accounting and financial reporting issues (GAO, 2002). The financial
Managerial Accounting � Part 4 � Individual AnalysisTo a large extent, the financial statements of both companies indicate that there has been sustained increase in both income and shareholder�s equity. However, Zoom registered greater revenue growth than Microsoft within the two years under consideration, i.e. between the years 2019 and 2020. More specifically, while Zoom had an 88.3% increase in revenue within the said period, Microsoft registered a 13.6% increase
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