Managerial Accounting Overhead Analysis Homework Help
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1.Many companies today are growing out of their accounting systems. In the old days, accounting systems were designed primarily to track daily transactions and provide reports to external users on a monthly, quarterly, or annual basis. But times have changed, and companies now need more information internally to make good decisions. Accounting systems are currently used for both external reporting (financial accounting) and internal reporting (managerial accounting). Even relatively small accounting packages, such as QuickBooks and Peachtree, provide features that are important for managerial accounting. However, most agree that no single accounting system will meet the needs of every organization and that two important factors must be considered when choosing a system. What are the two factors that must be considered when deciding on an accounting system?
2. Financial Versus Managerial Accounting. Maria is the loan officer at a local bank that lends money to Old Town Market, a small grocery store. She requests several quarterly financial reports on an ongoing basis to assess the store’s ability to repay the loan. Provide one example of a financial accounting report and two examples of managerial accounting reports that Maria might request.
3.Custom Furniture Company’s direct materials include items such as wood and hardware. Direct labor involves the employees who build the custom tables. Manufacturing overhead includes items such as indirect materials (glue, screws, nails, sandpaper, and stain), indirect labor (production supervisor), and other manufacturing costs, such as factory equipment maintenance and factory utilities. What accounts are used to record the costs associated with these items, and where do these accounts appear in the financial statements?
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4. All costs associated with the production process other than direct material costs and direct labor costs are called manufacturing overhead. Terms synonymous with manufacturing overhead include factory overhead, factory burden, and overhead. What items are included in manufacturing overhead?
5.Suppose you are the co-owner and manager of a retail store that sells and repairs mountain bikes. Provide one example of a financial accounting report that would be useful to you and your co-owner. Provide two examples of managerial accounting reports that would be useful to you as the manager.
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