BM6023
Question 1
(a) The following are actions associated with a firm’s accounting information system:
No Action
1.
Preparing financial reports that comply with generally accepted accounting
principles.
2.
Preparing a report that details profit by products.
3.
Preparing a budget for direct materials purchases.
4.
Voluntary reporting environmental costs to potential and existing investors.
5.
Reporting on the trends in product defect rates to the plant manager.
6.
Determining the cost of producing a new product.
7.
Preparing a report that compares the actual costs of quality with the expected
costs of quality.
8.
Depreciating an asset used in manufacturing using its historical cost.
9.
Determining how to consolidate the financial reports of two subsidiaries.
10. Assessing the cost of making versus buying a component of a product.
Required:
classify each of the actions as belonging to either managerial accounting or financial
accounting.
(Your answer should be stated as follows: Example: 12 – Managerial or 13 – Financial)
(5 marks)
(b) Management accounting can be used to enhance the values for customers. Choose a
management accounting technique or method, describe the chosen method and explain
how the values can be improved using the chosen technique or method.
(5 marks)
(c) Is management accounting relevant for not-for-profit organisations such as charitable
bodies? Discuss.
(5 marks)
TOTAL 15 MARKS