Acc301 C1 Quickreyes

Trident University International
Michelle Quickreyes
ACC310 Managerial Cost Analysis
Case 1 - (2022MAR21FT-1)
April 3, 2022
Introduction
Managerial accounting is a wide terminology that encompasses a variety of accounting
practices whose purpose is to improve the strength of information available to business leaders
for use in strategy development. Accounting professionals analyze data pertaining to the
expenditure and profits made by the particular economy. Further, this paper will outline the
major components of management economics, which focuses on analyzing an effective business
expenditure by assessing, which enables organizations to recognize and reduce reckless spending
while enhancing sales and profits.
Managerial Accountant Responsibility
The individual in charge of managing the firm's financial responsibilities has a constant
influence on the decision-making performance of any company (Tuovila, 2021). Managerial
accountants may be the one on the management board because this role is so critical to the
success or failure of any company. The implementation, management, and reliable management
of the most invaluable information at the most appropriate time may also be the responsibility of
the managerial accountant. Chief Intelligence Officer is another name for this person, who has a
wide range of knowledge about the many facets of a company's operations.
Key Terms in Cost Accounting
Cost object: Information gathering and processing would be considered the cost object.
Merchandise, product offerings, clients, professions, and the functional units of a business are all
examples of this type of information. Anything similar to that a management might do to put a
number on costs qualifies as this.
Direct costs: The direct cost is the percentage of a commodity or platform's overall value that is
being facilitated to assess the price of products and services. Consider the examples of
manpower and stock.
Indirect costs: Expenses that are not specifically correlated to the purchase decision or
commodity are known as indirect costs. The price of products sold includes this. Commodities,
raw expenses, marketing expenses, and transportation are just a few types of these costs.
Variable costs: Costs involved with manufacturing and marketing significantly affect the
amount of output. Among the most prominent applications of an operational variable cost is
incurred in the production feedstock.
Fixed costs: A fixed cost is one that does not change regardless of how much is produced or
sold. Leasing, real estate taxes, maintenance, and interest payments are some common forms of
spending. In addition to them, there are loan repayment, devaluation, coverage, and investment
returns.
Cost driver: In a production facility, a cost driver is the operation, such as the quantity of
requests that need to be processed. Service contracts and production overhead are two examples
in a storage facility that can be used as examples of this function.
Relevant range: This specifically refers to the degree of engagement that is bound by a given
range of amount. The importance of financial planning and accounting systems cannot be
overstated.
Direct materials: A company's raw ingredients and overall cost are accounted for in this
category of expenditure. Timber, theft, garments, and textiles are all forms of this.
Raw materials: Items are made from materials that are employed in the manufacturing process
and that are required for the production of such products. Metals, hardwood, and textiles are
examples of materials.
Work-in-process: These are sets of product lines in the phase of being assembled into a final
product. This is a stockpile of items that are awaiting fulfillment and inevitable buyout or
valuation. Articles in a backlog or overflow cache are awaiting performance testing, or they are
currently being manufactured.
Finished goods: A company can order this merchandise and have it delivered to your customers
at any given time, basically this is what a corporation sells as a finished good. As with all current
assets, finished goods are evaluated at the reduced cost or net realizable value in line with the set
substantial cost flow considerations.
Inventoriable costs: Devaluation on a company's assembly equipment in a merchandise
producer best explains this expense. They are the kind of prepaid expense that comes up when
you buy anything to resell.
Period costs: That which cannot be monetized as prepayments, inventories, or capital equipment
might best be described as this. Merchandising, marketing, and tourism related spending are all
forms of this.
Manufacturing overhead: When it comes to the production process of a corporation, this might
be termed as the "factory overhead", "factory load", or "production overhead". It is also known
as the "hidden cost”.

Prime costs: Primary costs include things like input materials. This is the major component that
is used to create the end deliverables. This is the expenditure that is intrinsically linked to
paycheck taxes in reference to the manufacturing of an item.
Conversion costs: Factors of production such as direct labor and production expenditures make
up this total. To properly appreciate this, consider how much time and money it takes to
transform raw resources into finished goods.
Idle time: This is the amount of time spent queuing up for equipment or dealing with any other
problems that arise throughout the course of producing one's goods.
Supply chain: Network or complex of individuals, actions, educational resources that move a
value proposition from a provider to a client are all part of this network or platform.
Value chain: This is the process that a business in a certain sector follows in providing the
customers with high-quality commodities.
Conclusion
Management accounting also includes an assessment of a company's expenditure trends,
with the knowledge of aforementioned key terms and an investigation of statistical differences or
aberrations. It is vital to assess this data in real time, because expenditures that are significantly
different from the norm are routinely scrutinized by independent audit. This branch of financial
reporting also makes use of data from prior periods to make projections about the present. A
variety of data sources can be employed in this process.

References
Tuovila, A. (2021, October 8). Managerial Accounting Definition. Investopedia.
https://www.investopedia.com/terms/m/managerialaccounting.asp
Venture Line. (n.d.). Accounting Terms - Accounting Dictionary – Accounting Glossary.
https://www.ventureline.com/accounting-glossary/

Acc301 C1 Quickreyes

Uploaded by

Copyright:

Available Formats

Acc301 C1 Quickreyes

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Acc301 C1 Quickreyes

Uploaded by

Copyright:

Available Formats

Trident University International

ACC310 Managerial Cost Analysis

Managerial accounting is a wide terminology that encompasses a variety of accounting

major components of management economics, which focuses on analyzing an effective business

while enhancing sales and profits.

Managerial Accountant Responsibility

influence on the decision-making performance of any company (Tuovila, 2021). Managerial

wide range of knowledge about the many facets of a company's operations.

Key Terms in Cost Accounting

number on costs qualifies as this.

manpower and stock.

incurred in the production feedstock.

in a storage facility that can be used as examples of this function.

currently being manufactured.

substantial cost flow considerations.

Inventoriable costs: Devaluation on a company's assembly equipment in a merchandise

you buy anything to resell.

as the "hidden cost”.

paycheck taxes in reference to the manufacturing of an item.

transform raw resources into finished goods.

problems that arise throughout the course of producing one's goods.

customers with high-quality commodities.

Management accounting also includes an assessment of a company's expenditure trends,

variety of data sources can be employed in this process.

Tuovila, A. (2021, October 8). Managerial Accounting Definition. Investopedia.

Venture Line. (n.d.). Accounting Terms - Accounting Dictionary – Accounting Glossary.

You might also like