Bus 630 Week 1 Discussion

BUS630 WEEK 1 Ashford University MANAGERIAL ACCOUNTING This week students will 1. Explain the pristine ethical responsibilities of the management accountant. 2. Illustrate the get word principles of motorbusial news report including cost concepts. 3. Distinguish between the behavior of inconsistent and fixed cost. 4. Explain the signifi bathce of cost behavior to decision do and control. 5. Determine the necessary sales in unit and dollars to break-even or bump off desired profit using the break-even formula. FINANCIAL VS MANAGERIAL ACCOUNTING-Financial accounting is the runner of accounting that organizes accounting information for presentation to interested parties outside of the organization. The primary financial accounting reports argon the balance sheet (often c anyed a account of financial position), the income direction, and the argument of cash flows. The balance sheet is a abridgment of assets, liabilities, and sh areholders equity at a specified point in pri son term. The income statement reports revenues and expenses resulting from the compeverys operations for a particular time period.The statement of cash flows shows the sources and uses of cash over a time period for operating, investing, and backing activities. autobusial accounting is the branch of accounting that meets passenger cars information needs. Because managerial accounting is designed to assist the firms managers in making calling decisions, relatively few restrictions are imposed by regulatory bodies and in the main accepted accounting principles. Therefore, a manager must define which info are relevant for a particular purpose and which are not. In managerial accounting, however, the segment is of major importance.Segments may be products, projects, divisions, plants, branches, regions, or any other subset of the business. Tracing or allocating costs, revenues, and assets to segments creates difficult exposes for managerial accountants. Two fundamental similari ties do exist. The transaction and accounting information systems discussed earlier are employ to generate the data inputs for both financial statements and management reports. Therefore, when the system accumulates and classifies information, it should do so in formats that accommodate both types of accounting.Discuss a possible oppose managerial scenario that the regional manager may be sensing. The regional Manager is piecing together trends and abnormalities in order to predict the near future of stick in 9. At a glance, we determine that hive away 9 run by an effective manager with a successful track record. However, the lack of investment in grooming signals an attempt to cut overhead cost in order to show a larger store profit. Cutting employee training may be an effective tool for the short term just now may create issues in the future. Additionally, we see that the Store has determined to sequestrate from several costly, but high visibleness events.Again, this may be a reduction in variable cost in order to stamp down store overhead in the short term and increase profitability. The Regional Managers concern is that the entire company profits from these club events, not just the single store, and therefore, the impact may be insalubrious to sales in multiple areas. Lastly, we see that store 6 has change magnitude its operating costs since the store manager in question departed. This signals an issue consistent with the concerns above that this manager simply aims to reduce overhead as low as possible in order to increase the overall store profit.Might the manager of Store 9 be an exceptional manager? Although on the surface, the three trends above may appear to be proscribe this store manager may in fact be a very effective manager. For example Perhaps instead of accounting for the trainees hours as overhead in training costs, he has put that respective(prenominal) in a position to learn-on-the-job, therefore, making the employees work ing hours into a direct labor cost and minimizing overhead. When it comes to publicize, we saw the manager spent some of his advertising dollars early in the year.It may be possible that the manager elected to spend his variable expense advertising dollars during a time period where they would produce the most sales, and hence tapered off his advertising dollars during a time period of steady business flow. Lastly, the cancellation of high visibility events may have been due to the determination that cost was not obedient substantial sales or visibility. Despite this fact, it stands to reason that a store manager would inform a regional manager of any choices having a broader impact to the overall company.If there was a lack of communication here, I believe it is to the detriment of the store managers credibility. What are the ethical implications of the scenario? Variable make up defines the cost of a single assembled product base on the materials consumed and labor invested directly in unit production. To illustrate our point, we can say that making a single baked tater with all of the fixings will cost $3. 00 to produce (potato, sour cream, chives, plate, fork, napkin and labor). If we solve to go into the baked potato business, we must then contend these potatoes for at least $3. 00 per unit.Any less would cause us to lose money on the endeavor. This cost cannot be made up by increasing masses of sales. Judy Koch discussed the fact that bulk purchases can benefit you reduce these variable costs. If we indomitable to purchase potato-making materials in larger quantities and hired more(prenominal) workers to produce these products, we could then possibly produce our product for a lower Variable Cost based on the new price. Fixed cost will pillow the same no matter how our potato shop does. As an example, our potato restaurant rental costs will be the same whether we sell one hundred potatoes or zero potatoes per month.The electricity, the heatin g costs, the managers salary. All of these factors will stay consistent no matter how many another(prenominal) units we sell. Judy Kochs statement is in reference to the fact that these costs are indeed changeable, however, they do not vary per unit sold. We can decide to upgrade our successful restaurant and pay higher rental fees, the brass can increase our tax liability and we can hire more management. None of these costs will increase if we sell more potatoes. They are independent of unit sales.