Archive about 'Managerial Accounting'

Give a brief contrast between Budgetary Control and Standard Costing

Tweet There seems to be a big difference when we understand that standard costing system is concerned with the manufacturing of a product or providing of a service whilst budgetary control system is concerned with the overall policy of the company.But are there any similarities between these two systems.? Yes, the following are the similarities […]

List Of Topics Under The Heading:Budget And Budgetary Control

Tweet This Content Page helps you to navigate to all articles relating to the Budgets and Budgetary Control.From each topic, you can return to this Content Page. Click to the respective topic: Content Page On BUDGET & BUDGETARY CONTROL 1.0 Objectives of Budgeting 2.0 Steps Involve In Budgeting 3.0 What Is a Budget Manual 4.0 […]

Explain what is a break-even chart.

Tweet The analysis of revenues and costs in relation to the volume of production is known as break-even analysis. This relationship can be best shown in a break-even chart where the point at which total revenue equals total costs is the break-even point. This break-even point is where a company is neither making a profit […]

Why is it important to understand Break-even point in Business Decisions

Tweet Break-even point is important for business decisions: As break-even point marks the very lowest level to which activity can drop without putting the life of the company in jeopardy. By understanding break-even analysis, a firm can decide on which following strategies to use in order to increase profit or decrease loss like: Increase sale […]

How to do we treat Idle Capacity in Cost Accounts?(Part 2 of 2)

Tweet Idle capacity can be broadly divided into  Normal or AbnormalTreatment of NORMAL IDLE CAPACITY in the cost accounts: Due to unavoidable reasons are included in works overheads and absorbed into the cost of production either by inflating the overhead rate or  by means of a supplementary overhead rate ( see article on details of […]

In Cost Account, explain what is Idle Capacity (Part 1 of 2)

Tweet Idle Capacity: That part of practical activity which cannot be utilized and beyond management control Mainly due to lack of demand, non-availability of materials, shortage of labour, seasonal nature of product and lower sales expectancy Idle capacity is the difference between the practical capacity and the capacity based on sales expectancy. It is therefore  […]

Managerial Accounting Quiz on Costs Concept

Tweet Refresh or test your managerial accounting knowledge on cost concepts: Multiple choice question 1. In making managerial decisions, relevant information is a. Future cost that differ between alternatives b. Future costs that do not differ between alternatives c. Past costs that differ between alternatives d. Past costs that do not differ between alternatives 2. […]

Managerial Accounting Quiz On Cost Behavior

Tweet Refresh or test your managerial accounting knowledge on cost behavior: Multiple choice question 1. A cost that changes abruptly at intervals of activity because the resources and the costs come in indivisible chunks is called a(n): a. Step cost b. Activity cost c. Allocated cost d. Apportioned cost 2. The _________ portion of a […]

Explain how to use graphical technique to draw a Break-even graph or Cost volume profit graph. What are the assumptions used in constructing the typical break even graph

Tweet Part A: how to construct a typical break-even point graph: The Break-even point can be found by graphing the cost and revenue relationships. The following are the steps to do so: Step 1: Draw the axes. The horizontal axis the sales volume and the vertical axis is dollars of cost and revenue. Step 2: […]

Managerial Accounting Quiz On Accounting Systems/Information

Tweet Refresh or test your managerial accounting knowledge on accounting systems or information: Multiple choice question 1. Accounting reports which are used by managers to compare actual results to budgeted performance in order to perform management by exception are called: a. Exceptional reports b. Performance reports c. Budgets d. General ledgers   2. Which of the […]