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Management Accounting - Materials Accounting / Absorption & Marginal Costing - Assignment Example
Author : monserratturcot
Finance & Accounting
Pages 5 (1255 words)
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)…
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. ...