MANAGEMENT ACCOUNTING

Management Accounting



Management Accounting

Park Square Chemicals is a joint stock company is engaged in the manufacture and distribution of paints, varnishes, printing inks as well as related printing ink activities and the manufacture of animal extract products. Co. produces various types of oil-based and water-based paints for use on concrete, wood & metal which are suitable for all types of environmental conditions. Co. is also involved in purchasing and dividing land for the purpose of using or reselling and performing specialized construction works.

Financial Highlights

Total Revenue

220,128,078

Net Income

54,957,876

Total Assets

609,149,104

Current Assets

425,882,990

Total Liabilities

194,846,906

Current Liabilities

176,955,168

Stockholders' Equity

414,258,647

Barker's statement of annual costs for the container department showed the following;

163;163;

Materials100000

Labor175000

Departmental Overheads

Managers Salary 40000

Rent 7500

Depreciation of Machinery 30000

Maintenance of Machinery 6750

Other Expenses 31500

115750

390750

Apportioned General Administrative Overhead 33750

Total Cost of Department for Year 424500

Management Accounting

Managers deal with the operations of the business, and with information that is internal to the business. We call this operating information(Brent, 2007). It involves things like product costing information, payroll information and other sensitive or confidential information. For this reason, operating information is not released to the public, but is used by managers to improve business performance, and ensure the objectives of the company.

Manufacturing costs are first classified into direct material, direct labor and manufacturing overhead. With these definitions established, we introduce the critical distinction between product and period costs(Boardman, 2006). This discussion in turn lays the foundation for introducing the manufacturing inventory accounts: raw materials, work-in-process, and finished goods.

The flow of costs through the inventory accounts is explained with the help of an extended illustration. The example includes a detailed analysis of the process of applying overhead using a predetermined rate.

Accounting cycles

An accounting system is often organized into accounting cycles. These cycles are connected and interrelated(Lundolm, 2005). Costs flow the product costing system as illustrated in your text, and ...