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Topic 1 - Overview Managerial Accounting-Summary

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188 views22 pages

Topic 1 - Overview Managerial Accounting-Summary

Uploaded by

Kuoy Nora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Management Control

Topic 1:
Overview Managerial Accounting

Adjunct Lecturer: Chamnab Nhel


Academic Year: 2024-2025
Today’s Agenda

▪ Course Syllabus Overview


▪ Welcome & Introduction
▪ The Role of the Managerial Accountant
▪ Managerial Accountant and Ethical Conduct
▪ Product and Service Cost
▪ Overview Financial Statements
▪ Problem Set 1
Grading Points

Items Percentage # of Assignment Point/Assignment Total Point

Attendance & Class Participation 20% 8 25 200

Problem Sets/Case Studies 30% 6 50 300

Mid-Term Exam 25% 1 250 250

Final Exam 25% 1 250 250

Total Points 1000

Note: A collaborative team or group assignment will be offered to reinforce critical concepts and potentially
earn you extra credit.
Self-Introduction

• Your name and Your Work

• A summary of your background

• Any expectations from this course

• Any other facts you wish to share


Topic 1: Learning Objectives
1. Explain the meaning of managerial accounting

2. Explain the differences between managerial and financial accounting

3. Explain the Role of the Managerial Accountant

4. Explain Managerial Accountant and Ethical Conduct

5. Explain the Product and Service Cost

6. Overview of Financial Statements

7. Who Uses Accounting Data?

8. Summary of Important Equations


1. The Meaning of Managerial Accounting

• Managerial accounting is providing accounting information for a


company’s internal users

• Is not bound by generally accepted accounting principles (GAAP)

• Managerial accounting has three broad objectives:

1. To provide information for planning the organization’s


actions

2. To provide information for controlling the organization’s


actions

3. To provide information for making effective decisions


2. Managerial Accounting vs Financial Accounting

Financial Accounting Managerial Accounting

Externally focused Internally focused

Must follow externally imposed rules: GAAP, No mandatory rules


SEC, etc.
Objective financial information for external users Financial and nonfinancial information;
subjective information possible
Historical Orientation Emphasis on the future
Information about the firm as a whole Internal evaluation and decisions based on
very detailed information for management
More self-contained Broad, multidisciplinary
3. The Role of the Managerial Accountant

• Managerial accountants play a critical role in an


organization's decision-making support.
• They assist those responsible (Management) for carrying
out an organization’s basic objectives by providing them
with various performance measurement information.
• Managerial accountants support decision-making by
analyzing data and providing key metrics, and they
identify cost-saving opportunities to improve profitability.
4. Managerial Accountant and Ethical Conduct

▪ Managerial accountants play a vital role in a company's


financial health. They are entrusted with sensitive
financial data and are responsible for using it ethically.
• Honesty: Truthful financial reporting
• Objectivity: Unbiased presentation of financial data
• Competence: Up-to-date skills for accurate data
• Confidentiality: Securing sensitive financial
information
• Credibility: Trustworthy and believable financial
reports
▪ Managerial Accounting Today focuses on the value
chain, balanced scorecard, and corporate social
responsibility.
5. Product and Service Cost

• Products are goods produced by converting raw


materials using labor and indirect manufacturing
resources, such as the manufacturing plant, land, and
machinery.
• Televisions, hamburgers, automobiles, computers,
clothes, and furniture are examples of products.
• Services are tasks or activities performed for a customer
or an activity performed using an organization’s
products or facilities.
• Medical care, car rental, teaching, dental care,
insurance coverage, and accounting are examples of
service activities.
5. Product vs Period Costs

Managers should ask questions such as the


following.
1. What costs are involved in making a
product or providing a service?
2. If we decrease production volume, will
costs decrease?
3. What impact will automation have on
total costs?
4. How can we best control costs?
6. Overview of Financial Statements

1. Income Statement: Tracks profit or loss over a defined period.


• Revenue - Cost of Goods Sold = Gross Profit
• Gross Profit - Operating Expenses = Operating Income
• Operating Income - Interest Expense = Pre-Tax Income
• Pre-Tax Income - Income Tax = Net Income (or Net Loss)
• Total Revenues - Total Expenses = Net Income (or Net Loss)
2. Balance Sheet Statement: The financial statement provides a one-time snapshot of a
company’s financial position at a specific point.
• Assets = Liabilities + Shareholders’ Equity.
3. Cash Flow Statement: This statement details the movement of cash in and out of the
business, categorized into three main activities: operating, investing, and financing
activities.
• Beginning Cash Balance + Cash from Operating Activities + Cash from Investing
Activities + Cash from Financing Activities = Ending Cash Balance
6. Overview of Financial Statements

Cost of Goods
Manufactured
6. Overview of Financial Statements
Determining the Cost of Goods Manufactured
* Total Work in Process: Cost of beginning work in process and total manufacturing costs
for the current period.
* Total Manufacturing Costs: Sum of direct material costs, direct labor costs, and
manufacturing overhead in the current year.
6. Overview of Financial Statements
6. Overview of Financial Statements
Income Statement
6. Overview of Financial Statements
6. Overview of Financial Statements
7. Who Uses Accounting Data?
8. Summary of Important Equations
Problem Set 1: Due Oct-28, 2024
COE Company manufactures protective glass for kids with tendonitis from video games. The firm had
the following inventories at the beginning and end of the month of January 2023.
1-Jan 31-Jan
Finished goods 126,000 117,000
Work in process 235,000 251,000
Raw material 133,000 124,000
The following additional data pertain to January operations.
Raw material purchased 192,000
Direct labor 300,000
Actual manufacturing overhead 170,000
Actual selling and administrative expenses 115,000
The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or
underapplied manufacturing overhead is accumulated until the end of the year.
Required:
1. Compute the company's prime costs
2. Compute the total manufacturing cost for January.
3. Compute the cost of goods manufactured for January.
4. Compute the cost of goods sold for January.
5. Compute the manufacturing overhead account on January 31. Debit (underapplied) or credit (overapplied)?
Thanks

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