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Managerial Accounting - Swipe 50 limited Assignment

   

Added on  2021-02-21

13 Pages4018 Words249 Views
Managerial Accounting Report

Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1A. Profit Statement......................................................................................................................1B. Reconciliation of statements ..................................................................................................4C. Difference between absorption costing and marginal costing ...............................................4D. Three Ways to improve accounting system...........................................................................7E. Importance of managerial accountant jobs for manufacturing company...............................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11

INTRODUCTIONManagerial accounting is the procedure to recognizing, measuring, analysing, interpretingand communicating information to managers for the pursuit of an organizational goals andobjectives (Achleitner and et.al., 2014) . On the basis of these information a manager takeappropriate decision and arrange all the company's operations. The management accountant ofthe company need to determine several events and operational metrics in reference to interpretthe data for using as useful information that can be advantage by the management of company.There are including some managerial topic like calculation of a producing products costs whichis important for the external financial statements which is essential to follow with US GAAP.The purpose of the report to develop understanding of the managerial accounting processes andlearn several types of accounting methods. The report based on the Swipe 50 limited, whichmanufactures unique screen protector for laptops computers. The presented report base on thecase study where produce profit statement for Swipe 50 Limited through using marginal andabsorption costing method. Define both methods in detail and how to different from each other.Apart from the report, define different accounting system in three ways and importance ofmanagerial accountants jobs for manufacturing company. MAIN BODYA. Profit StatementAbsorption Costing – It is a costing method where consist of all expenses and costs areconnected with manufacturing a particular product. This method essential for generally acceptedaccounting principles (GAAP) as external reporting. To calculate cost of finished productsthrough absorption costing method consist of different cost such as Direct materials – These types of material are using to calculate of finish products cost. Direct Labour – The factory labour cost important to construct a product. Variable manufacturing overhead – It is operating to provide facility of manufacturingcompany in effective manner. For example – supplies and electricity for productionequipment (Ahrens and Khalifa, 2015) . Fixed manufacturing overhead – The particular cost to conduct a manufacturing facilitywhich do not vary with production volume. For instance – Rent and insurance. 1

It is possible to apply activity based costing to circulate overhead costs for stockassessment in reference to absorption costing methodology. Income statements as per absorption costing:ParticularsPer unit rateFebruary MarchSales revenue22253000341000Less:cost of goods soldOpening stock-6710Direct material cost 2.32,2.292900033250Direct labour1.52,1.521900022000Variable production overhead0.58,0.5973008500Fixed production overhead2.288,1.972860028600Closing inventory6.71(6710)-Total cost of goods sold7719099060Gross profit175810241940Less: selling and administrativecost 4450057100Net profit131310184840Calculation of closing inventory cost per unit:ParticularsFebruaryDirect material cost2.32Direct labour cost1.52Variable production overhead0.58Fixed production overhead2.288Closing inventory per unit6.71Interpretation – As per the above table it has been analysed that there are calculating netprofit through absorption costing method in February and March. Through this method firstlycalculate cost of goods sold where includes opening stock, direct material cost, variableproduction overhead, fixed production overhead and closing inventory. These amounts are lessinto selling amount than get amount of gross profit. From the amount of gross profit less amountof selling and administrative cost which is 44500 in February and 57100 in March. After these2

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