Managerial Accounting

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student
Name of the University
Author’s Note

MANAGERIAL ACCOUNTING1
Table of Contents
1. Managerial Accounting..........................................................................................................2
2. Job Order Costing..................................................................................................................3
3. Process Order Costing............................................................................................................4
4. Cost Management Systems....................................................................................................5
5. Cost Volume Profit Analysis.................................................................................................6
6. Variable Costing.....................................................................................................................6
7. Decision Making....................................................................................................................7
8. Budgets and Standard Costing...............................................................................................8
References................................................................................................................................10

MANAGERIAL ACCOUNTING2
1. Managerial Accounting
Managerial Accounting refers to the process to prepare accounts and reports that
provide the management with timely and accurate financial information for making short-
term and day-to-day business decisions. Managerial accounting is responsible for generating
weekly and monthly reports for the internal users like departmental managers and others
(Kaplan & Atkinson, 2015).
Organizational managers use managerial accounting for extracting the required
financial and statistical data of the business for the purposes of keeping records, planning,
controlling and decision-making.
The primary responsibility of the management accountants is to execute certain tasks
for ensuring financial security of the firms while managing the necessary financial matters for
ensuring the firm’s financial success. These include budgeting, tax handling, aid in strategic
management and managing assets.
The main difference is that financial accounting aims at the preparation of financial
statements of a firm for providing required financial information to the key stakeholders
where managerial accounting aims at providing the necessary financial information to the
management for the purpose of short-term decision-making. Both internal and external users
can use financial management while only internal users can use managerial accounting
(Brewer, Garrison & Noreen, 2015).
The ethical standards of management accountants include maintaining competence,
confidentially, integrity and credibility. In addition, they are needed to follow the ethical
policies and procedures of the organizations for the resolution of any ethical issue.

Product
Costs
Raw Materials
Direct Labour
Manufacturing
overhead
Balance Sheet
Raw Material Inventory
(Direct Materials used
in production)
Work-in-Process
Inventory (Goods
completed-cost of
manufactured goods)
Finished Goods
Inventory
Period
Costs
Selling and
Administrative
Overheads
Income
Stateme
nt
Cost of
Goods Sold
Selling and
Administrati
ve
Expenses
MANAGERIAL ACCOUNTING3
2. Job Order Costing
Job Order Costing refers to a system to assign and accumulate manufacturing costs of
a single unit of output. The use of this costing system can be seen in the presence of
adequately different produced items from each other while each of the has a significant cost
(Hilton & Platt, 2013).
The main difference is that job order costing involves in calculating the cost of special
contracts and work order involving work performance as per the client’s instruction where
process costing involves in charging different processes and operations which are determined.
Under job order costing, manufacturing costs are assigned to work-in-progress; costs
of the completed jobs are transferred to finished goods; at the time of selling of the units, the
cost is transferred to cost of goods sold. The cost flow is shown below:
Figure 1: Flow of Cost through Job Order Costing System
(Source: As created by Author)