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Accounting 6 Pages

Management Accounting

Question

You are required to finish each of these questions, total 40 marks. Please give the solutions in detail, show calculations and submit the solutions to Moodle using a single file, it can be Excel format, Word format or PDF format, no requirement on word limits, if use any references, please refer to Harvard style.

Question 1: Differences between management accounting and financial accounting (15 Marks)

You are the financial controller of a large manufacturing organization and intend to approach the human resources (HR) manager seeking to create two new positions: a financial accountant and a management accountant.

Required:

1 Prepare a briefing document for the HR manager which explains the differences between these two roles.

2 Formulate (and answer) the five likely questions that you anticipate the HR manager will ask you about these two positions when you meet.

Question 2: Product cost classification: manufacturer (15 Marks)

 The following cost data for the current year relate to Heartstrings Pty Ltd, a greetings card manufacturer:

Service department costs1                                             $50 000

Direct labour: wages                                                        242 500

Direct labour: on-costs                                                    47 500

Indirect labour: on-costs                                                 15 000

On-costs for production supervisor                               4 500

Administrative costs                                                          75 000

Rental of office space for sales personnel                     27 500

Sales commissions                                                            2 500

Product promotion costs                                                 5 000

Direct material                                                                   1 050 000

Advertising expense                                                          49 500

Depreciation on factory building                                    57 500

Cost of finished goods inventory at year end               57 500

Indirect labour: wages                                                      70 000

Production supervisor's salary                                        22 500

Total overtime premiums paid                                        27 500

Cost of idle time: production employees                      320 000

Required:

Calculate each of the following costs for the year:

  1. Total prime costs.
  2. Total manufacturing overhead costs.
  3. Total conversion costs.
  4. Total product costs (for external reporting purposes).
  5. Total period costs.

Question 3: Cost behavior; engineered cost; committed and discretionary costs: manufacturer(10 Marks)

HappyDaze T-shirts manufactures and prints customised designs on T-shirts. Below is a list of some of their major costs.

  1. Cost of daily radio advertising on the local community radio station.
  2. Cost of the fabric used to make the T-shirts.
  3. Cost of the ink used in the designs.
  4. Salary of the managing director.
  5. Wages of the production employees who sew and print the T-shirts.
  6. Cost of movie tickets provided for the Employee of the Month award each month.
  7. Depreciation of the sewing machines, calculated on a units of production basis.
  8. Cost of electricity used in the factory building.
  9. Rent of the building.
  10. Wages of the staff who package the T-shirts.
  11. Cost of sewing machine maintenance.
  12. Cost of the new advertising sign at the front of the factory.
  13. Cost of the company car used by the managing director.

Required:

For each cost:

  1. Indicate whether it is fixed or variable.
  2. If the cost is variable, indicate whether it is an engineered cost. Explain why.
  3. If the cost is fixed, indicate whether it is committed or discretionary. Explain why.
Solution

Title: Management Accounting
Length: 6 pages (1500 Words)
Style: APA

Preview

Question 1: Differences between management accounting and financial accounting (15 Marks)

You are the financial controller of a large manufacturing organization and intend to approach the human resources (HR) manager seeking to create two new positions: a financial accountant and a management accountant.

Required:

1 Prepare a briefing document for the HR manager which explains the differences between these two roles.

Financial accounting basically focuses on the business organisation’s financial statement. The financial statements are distributed in financial analysts, lenders, stockholders and outside of the company. The work of accounting revolves around the results of an organisation’s past transactions on the statement of cash flows, income statement, balance sheet and the statement of changes in stockholder’s equity.

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