Managerial Term
Managerial Accounting

FINAL EXAMINATION

Please complete the following by typing your answer letter next to "ANS" (example "ANS: c) and return to your Instructor via Blackboard by midnight, August 1, 2012:

A (n) ____ is a review to determine whether the policies and procedures specified by top management have been implemented.

A) management audit

B) internal audit

C) internal control

D) internal accounting control

2) Variances

A) are quantitative expressions of plans of action

B) ignore areas that are problem areas

C) are deviations from a plan

D) ignore areas that are presumed to be running smoothly

3) Which of the following costs is a variable cost?

A) rental expense for factory building for manufacturer of electronics

B) lease cost for factory machine for manufacturer of electronics

C) fuel for airplane for airline

D) depreciation expense of airplane for airline

ANS: C

4) On Fire Company, a producer of electronic devices, has the following information:

Selling price per unit $5.00

Variable cost per unit $3.00

Total fixed costs $90,000.00

The contribution-margin ratio…...

Managerial Accounting
Managerial accountants are charged with all financial matters that do not pertain to the financial accounting statements. ithin their company, they ensure that the company has good financial security, they perform analysis on costs and revenues, they perform budgeting, handle taxes, and their work is frequently used in strategic planning, whereby they provide the financial analysis to management to help make better decisions (No author, 2012). Some of the ways in which the job contributes have changed, especially with the advent of computerized decision-support systems, information systems and dashboards, each of which provides real time information to the managers, including cost information. The integration of these systems with managerial accounting has only served to make the managerial accounting role even more important over time.

This role has not changed over time, although arguably the management accountant role has become more prominent. Management accountants have always performed their existing functions, so…...

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Works Cited:

Investopedia. (2012). Definition of 'activity cost driver'. Investopedia. Retrieved April 13, 2012 from  http://www.investopedia.com/terms/a/activity-cost-driver.asp 

No author. (2012). Becoming a managerial accountant: Salary and job description. DiplomaGuide.com. Retrieved April 13, 2012 from  http://diplomaguide.com/articles/Managerial_Accountant_Career_Info.html 

No author. (2012). Role of the management accountant. All Business Schools.com. Retrieved April 13, 2012 from  http://www.allbusinessschools.com/business-careers/accounting/management-accounting 

YouTube. (2012). "Chapter 21: Cost allocation and performance management activity-based costing, part 1." Northern Virginia Community College. Retrieved April 13, 2012 from

Managerial Accounting
Accounting

Managerial accounting is different from financial accounting because it is used primarily by companies and organization to generate weekly, daily and monthly reports to help them forecast future financial events (Birnberg, 1992). The profession of managerial accounting looks at the many ways managers can help facilitate increased revenues over defined times, and the future in general. It is not concerned with investments as much as it is concerned with the overall profitability of the company in which the manager works with. Managerial accounting once began as a method of simply keeping track of an organizations time and finances, much like a treasurer might. Over time however, and especially given the current global state of the economy, managerial accounting is now concerned with the profitability and future success of organizations not just domestically but also globally. The use of the internet and technology has dramatically changed the way organizations conduct…...

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References:

Bhide, A.V. 2000. The origin and evolution of New Businesses. Oxford University Press.

Birnberg, J.G. 1992. Managerial accounting: Yet another perspective. Advances in Management

Accounting (1): 1-19.

Collingwood, H. 2001. The earnings game: Everyone plays, nobody wins. Harvard Business

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 customer types are significant money-losers.

Assessment of Problems and Issues

The company faces a few issues in the marketplace. Elkay now has new competition entering the market from China, and this new competition is going to drive down the price on poorly-differentiated products at the low end. This is a natural consequence of new competition in a market that was previously in an equilibrium state. The new competition is going to challenge some of Elkay's customers to drop the company.

Another issue in…...

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Works Cited:

Kaplan, R. (2010). Elkay plumbing products division. Harvard Business School Case 9-110-007

That we do not find out about cost overruns until the project is completed creates a climate where managers are motivated to overlook past transgressions yet are powerless to address future ones. Lastly, I would tie performance-based bonuses either to non-financial measures or to ones based on financial accounting, subject to GAAP and other defined rules and procedures. In general, financial incentives are only necessary when there are competing incentives (Jensen, 1994); that is not the case here.
1. Sue faces multiple challenges. She has cost overruns on her major project; her incentives do not correspond with what is best for the company (agency problem); and she may embarrass the company if the project comes in over budget. She has few tools with which to work. She has basic financial statements and managerial accounting statements. There were no interim statements to help her gauge the financial status of K3 or…...

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Works Cited:

Cohen, J.R., Pant, L.W., Sharp, D.J. (2000, February). Project earnings manipulation: an ethics case based on agency theory. Issues in Accounting Education. 15(1), p89-104.

Jensen, M. (1994). Self-interest, altruism, incentives and agency theory. Journal of Applied Corporate Finance. Summer 1994.

Managerial Accounting
E-Company

Income Statement

Contribution Margin

For Period Ended Dec 31, 20XX

Revenue

less V Mfg Cost

less V Op/Selling Cost

Gross Profit (Contribution Margin)

Fixed Mfg Overhead

Fixed S&A Exp

Total Fixed Costs

Net Income

$4,765,000

E-Company Income Statement

Absorption Method

For Period ended Dec 31, 20XX

Revenue

Less Mfg Cost

Less Op/Selling Cost

Less S&A Exp

Net Income

$5,485,500

The gross profit margin is 75.6%. This is calculated as the (revenue -- cogs) / revenue (Investopedia, 2011). The contribution margin is similar, but does not include costs associated with goods still sitting in inventory. It would be more easily calculated as (29 -- 1.2 -- 4.9) / 29 = 78.9%.

The net margin should be calculated on the basis of the GAAP income statement, so in that case it would be $4,765 / $10,005 = 47.6%. If the net margin was calculated on the basis of the absorption income statement, the net margin would be (5485.5 / 10005) = 54.8%.

There are a few points of difference between the two methods that…...

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Works Cited:

Heier, J. (no date). Absorption vs. variable costing. Biz.aum.edu. Retrieved November 25, 2011 from http://www-biz.aum.edu/janheier/ABSORB2020.htm

Investopedia (2011). Gross profit. Investopedia.com. Retrieved November 25, 2011 from  http://www.investopedia.com/terms/g/grossprofit.asp#axzz1ekdqCYf5 

Investopedia. (2011). Contribution margin. Investopedia.com. Retrieved November 25, 2011 from  http://www.investopedia.com/terms/c/contributionmargin.asp

2. Research the answers to management tax or auditing questions- once an accountant understands their job, they must be prepared to answer very specific questions concerning the accounting information that is provided (Johnstone & Biggs, 1998). hile most CEO's and people in various departments have some understanding of accounting, there are some very intricate financial details that only accountants fully understand (Johnstone & Biggs, 1998). ith this understood, successful accountants will be prepared to answer complicated questions related to management tax and auditing questions. If the accountant does not have the capacity to answer these questions correctly the decisions that the business managers make may be incorrect.

3. Convey the results to colleagues- not only do successful mangers have to be able to understand and answer questions; they also must have the capacity to convey results with colleagues (Johnstone & Biggs, 1998). This means that successful managers must have good communications…...

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Works cited

Bampton R. & Cowton Christopher J. (2002)the teaching of ethics in management accounting: progress and prospects. Business Ethics: A European Review. Vol. 11(1), p52-61, 10p

Bhimani, Alnoor (Editor). Contemporary Issues in Management Accounting.

Oxford,, GBR: Oxford University Press, UK, 2006. p 37.

"Certification." Institute Management Accounting. Retrieved August 21, 2009 from:  http://www.imanet.org/certification.asp

Managerial Accounting
According to Investopedia, management accounting is "the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals." The essence of managerial accounting is that managers blend and merge accounting information into realistic and practical goals and objectives. Ultimately, mangers should try to incorporate the three E's of efficiency, economy and effectiveness. This essay will address three methods that attempts to address these three principles and compare them to determine which one is the most important.

One method of maximizing the use of accounting management is to become aware of the benefits of efficiency. Chandler (1977) revealed that the coordinating efforts accomplished at the managerial level can have a profound and deep impact on the efficiency of an organization. These principles are revealed in this author's five benefits discussed in his argument for the rigid coordination inherent in a staff and line organization. Efficiency is…...

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References

Arun, TK, (2012). Management Accounting Gaining Importance in the Era of Globalization. The Economic Times, 21 April 2012. Retrieved from  http://articles.economictimes.indiatimes.com/2012-04-21/news/31379051_1_cost-accountants-management-accountants-works-accountants 

Investopedia. " Managerial Accounting." Viewed 21 Oct 2013. Retrieved from

Managerial accounting intended provide managers information make decisions run company successfully. The information reliable, timely complete. Its provision,, dictated accounting management information system place.
Managerial accounting

The fastest growing and developing field in today's society is indubitable the IT sector, which has transformed from a closely regulated and controlled experiment into a force impacting every aspect of the daily life, from the preparation of breakfast to the completion of complex professional chores. Within the business community, technological development has been represented through a wide array of elements, one of the more common ones being the development and implementation of EP -- enterprise resource planning. EP is generically defined as "a system which brings all the decision making information from all the departments in a company into one single place in order to increase efficiency, productivity and profit of the company" (EP Definition, 2010).

The introduction of the EP is as such expected to…...

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References:

Granlund, M., Malmi, T., 2002, Moderate impact of ERPs on management accounting: a lag or permanent outcome? Management Accounting Research, Vol. 13

Ho, T.Y., 2006, Impact of ERP and OLAP systems on management accounting practices and management accountants, Swedish School of Economics and Business Administration, last accessed on June 23, 2011http://www.pafis.shh.fi/graduates/tinho04.pdf

Puthran, S., 2006, Best practice managerial accounting with mySAP ERP financials, Management Accountant Blog,   last accessed on June 23, 2011http://www.managementaccountant.in/2006/11/best-practice-managerial-accounting.html 

2006, The advantages and disadvantages of ERP, Exforsys Inc.,   last accessed on June 23, 2011http://www.exforsys.com/tutorials/erp/the-advantages-and-disadvantages-of-erp.html 

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 data their emphasis differs. Managerial accounting has a measure to guide and direct the mangers orientation on future perspectives of a firm. Financial accounts primarily provide information on the firms past performance and transactions in summary. The managerial accounting aspect gives a detailed reflection of constantly monitored performances and a reflection for projected estimates (achchh, 2011).

Objectivity and validity of financial accounting information is an expectation of the users. Managerial accounting information need only to be relevant its verifiability is not…...

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References

Blocher, Stout, Cokins, & Chen. (2008). Cost Management. New York: McGraw-Hill Companies.

Gerhart, B., Hollenbeck, J., Noe, R., & Wright, P. (2007). Fundamentals of human resource management. Inc. New York: McGraw-Hill Inc.

Harrison Jr., W., Horngren, C.T., & William, C.T. (2012). Financial accounting 9th edition. U.S.A.: Prentice Hall

Kaplan, T. (2009). "The Tylenol Crisis: How Effective Public Relations Saved Johnson & Johnson," in Glen Broom, Allen Center, and Scott Cutlip, Effective Public Relations. Upper Saddle River, NJ: Prentice Hall, .

Managerial Accounting -- Budgeting: Differential Analysis
This assignment considers variable costing as a decision-making tool for evaluating whether to accept an order to manufacture Product C, which is a product proposed by an existing customer for whom Lewis Company is manufacturing Product B. Two general methods for valuing inventory and for determining the cost of goods sold are absorption costing and variable costing. The data in this case study is presented in the absorption costing format. Absorption costing is typically associated with financial reports, as in this case, with the Absorption Income Statement. Managers prefer variable costing as a tool for making business decisions ("Accounting for Management," 2012). Variable costing must be employed when the contribution margin format is used in an income statement ("Accounting for Management," 2012). To say that these two methods are simply alternative approaches would be a misstatement since the two costing systems can generate substantively different…...

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References

____. (2012). Variable Costing System: A Decision Making Tool for Management. Accounting for Management. Retreived http://www.accounting4management.com/variable_and_absorption.htm#UiQCUejMrZJTKMDq.99

Gregory, A. (2012). Getting and keeping money. About.com. Retrieved  http://sbinformation.about.com/od/creditloans/u/moneymatters.htm 

Hermanson, R.H., Edwards, J.D., & Invacevich, S.D. (2011). Accounting Principles: A Business Perspective. (1st ed.). Managerial Accounting. Retrieved  http://textbookequity.com/oct/Textbooks/TBQ_PA_Accounting_managerial.pd 

Walter, L.M. (2011). Principles of Accounting: A Complete Online Text, chapters 21 and 22. Retrieved from   / [Type text] [Type text] [Type text]http://www.principlesofaccounting.com 

Managerial Accounting -- Budgeting 1 &
(1) Is this a static or flexible budget?

Since many of the budget line items are based on student enrollment, this budget format is considered to be a flexible budget. The costs of providing instructors and associated benefits is fixed by the state with regard to the ratio of students to teachers, and students per classroom (which is more a function of fire codes and building codes, but it is still a determinant with regard to budget flexibility). The expenses associated with the school facility are fixed and generally cannot deviate in response to increases or decreases in enrollment. Personnel and plant costs are two major items in the school budget, and neither provides options for flexibility. That said, much of the proposed budget is based on student enrollment scenarios -- of which there are three at 120 students, 100 students, and 66 students. As we…...

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References

Churchill, N.C. (1984, July 1). Budget Choice: Planning vs. Control. Harvard Business Review. Prod. #: 84403-PDF-ENG. Retrieved  http://hbr.org/product/budget-choice-planning-versus-control-harvard-busi/an/84403-PDF-ENG 

Hermanson, R.H., Edwards, J.D., & Invacevich, S.D. (2011). Accounting Principles: A Business Perspective. (1st ed.). Managerial Accounting. Retrieved  http://textbookequity.com/oct/Textbooks/TBQ_PA_Accounting_managerial.pd 

Richards, D. (2013). Entrepreneurs. About.com. Retrieved  http://entrepreneurs.about.com/od/businessplan/a/breakeven.htm 

Walter, L.M. (2011). Principles of Accounting: A Complete Online Text, chapters 21 and 22. Retrieved from   / [Type text] [Type text] [Type text]http://www.principlesofaccounting.com 

Managerial Accounting
Why do you think the division was profitable immediately under the new ownership?

An organization uses cost allocation methods to determine the cost of one unit of its product. Cost allocation refers to the process of linking all the cost incurred during the production process to the product. Direct costs and indirect costs are the cost associated with production of a product. Direct costs are those that are traceable to the product such as the price of wool in the production of shirts. Indirect costs are not traceable to the final product directly as taxes charged. Cost allocation enables the organization to determine the cost of its products by ensuring that a profit margin allocated to every unit produced.

In the case study, the manufacturer found that a component of the company was producing losses thus decided to sell. A group of workers bought the division and realized profit immediately after…...

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References

Hansen, D.R., Mowen, M.M., & Guan, L. (2009). Cost management: Accounting and control. Mason, Ohio: South-Western.

Vanderbeck, E.J. (2012). Principles of cost accounting. Mason, OH: South-Western, Cengage Learning.

Managerial Accounting
Cost-volume-profit analysis is a tool used in managerial accounting that helps companies to determine the level of production (and sales) required by the company to break even. In CVP analysis, costs are separated into fixed and variable costs. The assumption is that the fixed costs do not change, while the variable costs do change with the level of production. Once sales are taken into account, so are variable costs, with the leftover being the contribution to fixed costs. The point where the contribution equals the fixed costs is the breakeven point. The basic CVP formula, therefore, is as follows:

Profit = total revenue -- variable costs -- fixed costs

There are a couple of main reasons why CVP analysis is valuable. The first is that this form of analysis can help guide production/sales decisions. CVP analysis can, for example, help a company know when a product should be cut from its…...

Managerial Accounting
The company taken for analysis is: Microsoft Corporation. The company has a history as follows: The revenue comes from developing a wide range of software products and services for all types of computing devices. The software products include operating systems like the Windows Series for personal computers, servers, and many other business solutions applications. The company also sells some hardware and gaming products like Xbox 360 gaming and even digital music and internet services like Bing, Windows Live, Microsoft Office Web Apps, and also the recent online advertising through the adCenter platform. Microsoft has consistently remained the top company in the industry with stake holder support seen through the higher value of the stock and ratings.

Did the company perform well? Why or why not?

To manage a portfolio it is necessary to look at the cash flow situation, and the profitability of the company and the ratios that are indicative…...

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References

Ballmer, Steven A. (2010) "Management's discussion and analysis of financial condition and results of operations" Annual Report 2010.

Retrieved 27 September 2011 from  http://www.microsoft.com/investor/reports/ar10/10k_fr_dis.html 

Brentani, Christine. (2004) "Portfolio management in practice."

Butterworth-Heinemann.

Management accounting combines traditional accounting responsibilities with management responsibilities, which allows a company to align budgetary considerations with the people handling the money.  There are a variety of different topics in management accounting that could serve as a good springboard for research, because how it is applied can vary tremendously depending on the size, purpose, and structure of an organization.  Regardless of the approach, it is clear that management accounting has become an important component of the decision-making process in business of all sizes and that the continued evolution of this practice should results in....