Managerial Accounting - Solved Assignment

Managerial Accounting
Eighth Edition
Weygandt ●Kimmel ●Kieso
Chapter 1
Managerial Accounting
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Chapter Outline
Learning Objectives
LO 1Identify the features of managerial accounting and
the functions of management.
LO 2Describe the classes of manufacturing costs and the
differences between product and period costs.
LO 3Demonstrate how to compute cost of goods
manufactured and prepare financial statements for a
manufacturer.
LO 4 Discuss trends in managerial accounting.
2Copyright ©2018 John Wiley & Sons, Inc.

Managerial Accounting Basics
LEARNING OBJECTIVE 1
Identify the features of managerial accounting and the
functions of management.
Provides economic and financial information for
managers and other internal users.
Comparing Managerial and Financial Accounting
Similarities and differences:
•Each field deals with economic events of a business
•Both require that economic events be quantified and
communicated to interested parties
LO 1 3Copyright ©2018 John Wiley & Sons, Inc.

Comparing Managerial and Financial
Feature Financial Accounting Managerial Accounting
Primary Users
of Reports
External users: stockholders,
creditors, and regulators.
Internal users: officers and
managers.
Types and Frequency
of Reports
Financial statements.
Quarterly and annually.
Internal reports.
As frequently as needed.
Purpose of Reports General-purpose. Special-purpose for
specific decisions.
Content of Reports
Pertains to business as a whole.
Highly aggregated (condensed).
Limited to double-entry accounting
and cost data. Generally accepted
accounting principles.
Pertains to subunits of the
business. Very detailed.
Extends beyond double-entry
accounting to any relevant
data. Evaluated based on
relevance to decisions.
Verification Process Audited by CPA. No independent audits.
LO 1 4Copyright ©2018 John Wiley & Sons, Inc.

Management Functions
Planning
•Maximize
short-term
profit and
market share
•Commit to
environmental
protection and
social
programs
•Add value to
the business
Directing
•Coordinate diverse
activities and human
resources
•Implement planned
objectives
•Provide incentives to
motivate employees
•Hire and train
employees
•Produce a smooth-
running operation
Controlling
•Keeping activities
on track
•Determine whether
goals are met
•Decide changes
needed to get back
on track
•May use an informal
or formal system of
evaluations
LO 1 5Copyright ©2018 John Wiley & Sons, Inc.

Organizational Structure
Organization charts show the interrelationships of activities and the delegation of
authority and responsibility within the company.
LO 1 6Copyright ©2018 John Wiley & Sons, Inc.

Do It! 1: Managerial Accounting
Indicate whether the following statements are trueor false.
1. Managerial accountants have a single role within
an organization: collecting and reporting costs to
management.
False
2. Financial accounting reports are general-purpose
and intended for external users. True
3. Managerial accounting reports are special-purpose
and issued as frequently as needed. True
LO 1 7Copyright ©2018 John Wiley & Sons, Inc.

Do It! 1: Managerial Accounting (Continued)
Indicate whether the following statements are trueor false.
4. Managers’ activities and responsibilities can be
classified into three broad functions: cost
accounting, budgeting, and internal control.
False
5. Managerial accounting reports must now
comply with generally accepted accounting
principles (GAAP).
False
LO 1 8Copyright ©2018 John Wiley & Sons, Inc.