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Management Accounting - Materials Accounting / Absorption & Marginal Costing - Assignment Example

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Management Accounting - Materials Accounting / Absorption & Marginal Costing

The formats of management accounts are exclusively at the discretion of managers. However, financial reports must adhere to International Financial Reporting Standards and International Accounting Standards (Colin 2007). This makes financial reports virtually standardized while management accounting formats and systems vary widely among and within organizations. Financial accounting deals with financial information in monetary terms while management accounting deals with both monetary and non monetary. Financial accountings represent collection of entities, operations and activities for the whole organization, including any subsidiaries, in other hand management accounting focus in more specific activities, operations, departments or sections (Colin 2007). Q2 1. Direct materials are raw materials used in the creation of the final product; they are those materials which can be trace in the final product. It enters directly to the product to form part of final product 2. Indirect materials are any material that are not part of the final product or used to make the product. Cleaning products are an indirect material cost. 3. Direct labor is wages of the people that actually provide direct labor in manufacturing specific products. It includes only those workers who are manufacturing the product directly. 4. Indirect labor is wages of anybody who does not contribute directly to manufacturing a product, but are still required in the manufacturing industries. 5. Manufacturing overhead are other costs incurred in the factory which are not direct labor and direct materials, also known as factory or production overhead for example salaries of maintenance personnel, manufacturing manager or rent of the factory building (Bob 2004). (3)4get2 ltd (I) LIFO Costing Method Date Receipts Issue Balances quantity Rate(€) Amount(€) quantity Rate(€) amount(€) quantity rate(€) amount(€) 1st Aug 2000 10 20000 2000 10 20000 8th Aug 620 10.80 6696 2620 26696 18th Aug 1350 620 10.80 6696 730 10 7300 1270 10 12700 7th Sept 600 11.50 6900 1870 19600 20th Sept 400 12.50 5000 2270 24600 15th Oct 1250 400 12.50 5000 600 11.50 6900 250 10 2500 1020 10 10200 15th Nov 350 10 3500 670 10 6700 7th Dec 1050 11 11550 1720 18250 24th Dec 640 11 7040 1080 11210 Closing stock on 31st December 4510+6700=11,210 (II) FIFO Costing Method Date Receipts Issue Balances quantity Rate(€) Amount(€) quantity Rate(€) amount(€) quantity rate(€) amount(€) 1st Aug 2000 10 20000 2000 10 20000 8th Aug 620 10.80 6696 2620 26696 18th Aug 1350 10 13500 650 10 6500 620 10.80 6696 7th Sept 600 11.50 6900 1870 20096 20th Sept 400 12.50 5000 2270 25096 15th Oct 1250 650 10 6500 600 10.80 6480 1020 12116 15th Nov 350 20 10 200 330 11.50 3795 670 8121 7th Dec 1050 11 11550 1720 19671 24th Dec 270 11.50 3105 370 12.50 4625 1080 11941 Closing stock on 31st December 375+11,550=11,925 (iii) Date Receipts Issue Balances quantity rate amount quantity rate amount quantity rate amount 1st Aug 2000 10 20000 2000 10 20000 8th Aug 620 10.80 6696 2620 10.189 26695.18 18th Aug 1350 10.189 13755.15 1270 10.189 12940.03 7th Sept 600 11.50 6900 1870 10.61 19840.70 20th Sept 400 12.50 5000 2270 10.943 24840.61 15th Oct 1250 10.943 13678.75 1020 10.943 11161.86 15th Nov 350 10.943 3830.05 670 10.943 7331.81 7th Dec 1050 11 11550 1720 10.978 18882.16 24th Dec 640 10.978 7025.92 1080 10.978 ...Show more

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Management Accounting - Materials Accounting / Absorption & Marginal Costing Name College Course Date Question 1 Different between Financial and Management accounting Financial accounting statements are prepared to be used by external parties such as creditors, shareholders and financial institutions while management accounting statements are prepared for the use of internal parties such as managers and employees (Bob 2004)…
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