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MANACC

The document discusses objectives, advantages, and features of management accounting and information systems. It aims to provide accurate information, track company finances efficiently, and make processes more effective. Key advantages include providing the right information efficiently and accurately. Features covered include financial ratios, cost-volume-profit analysis, return on investment, residual income, standard costs, and sample problems.

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Nadine Kyrah
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328 views22 pages

MANACC

The document discusses objectives, advantages, and features of management accounting and information systems. It aims to provide accurate information, track company finances efficiently, and make processes more effective. Key advantages include providing the right information efficiently and accurately. Features covered include financial ratios, cost-volume-profit analysis, return on investment, residual income, standard costs, and sample problems.

Uploaded by

Nadine Kyrah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MANAGEMENT ACCOUNTING AND

INFORMATION SYSTEM
OBJECTIVES

• Provide accurate amounts


• To make work flows and processes more efficient
and effective
• Track the income and spending of the company in
a simple way
ADVANTAGES

• Provide the right information


• Not time consuming
• Accuracy
• Efficiency
• Availability of information
FEATURES
• Financial ratio – a comparison in fraction, proportion, decimal or
percentage form of two significant figures taken from financial
statements.
• Cost-Volume Profit – is one of the most powerful tools that
managers have at their command.
• Return On Investment – is the benefit to an investor resulting
from an investment of some resource.
• Residual Income – is net operating income that an investment
center is able to earn above same minimum return on the operating
assets.
• Standard costs – represent what costs should be under attainable,
acceptable performance.
FINANCIAL RATIOS

Current ratio = Total Current Assets


Total Current Liabilities
Debt ratio = Total Liabilities
Total Assets
Equity ratio = Total Equity
Total Assets
Debt to Equity ratio = Total Liabilities
Total Equity
CVP ANALYSIS

Contribution Margin = Sales – Variable Cost


CM per unit = Unit Selling Price – Unit Variable Cost
CM Ratio = Contribution Margin
Sales
CVP ANALYSIS

Break-even Point (units) = Total Fixed Cost


CM per Unit

Break-even Point (Peso) = Total Fixed Cost


CM Ratio
RETURN ON INVESTMENT

ROI = Net Operating Income


Average Operating Asset
RESIDUAL INCOME

Residual Income = Operating Income –


(Total Assets x Required Rate
of Return)
STANDARD COST

a. Materials Price Variance


Actual Materials Purchases
Less: Actual Quantity at Standard Price

b. Materials Efficiency Variance


Actual Quantity Used at Standard Price
Less: Standard Quantity at Standard Price
STANDARD COST

c. Labor Rate Variance


Actual Labor Cost
Less: Actual Hours at Standard Rate

d. Labor Efficiency Variance


Actual Hours at Standard Rate
Less: Standard Hours at Standard Rate

e. Variable Overhead Spending Variance


Actual Variable Overhead
Less: Actual Hours at Standard Variable Overhead Rate
STANDARD COST

f. Variable Overhead Efficiency Variance


Actual Hours
Less: Standard Hours
Multiply by: Std VOR

g. Fixed Overhead Price (Spending) Variance


Actual Fixed Overhead
Less: Budgeted Fixed Overhead
SAMPLE PROBLEMS

Total Current Assets – 32,923


Total Assets- 47,649
Total Current Liabilities- 13,703.50
Total Liabilities- 24,681.50
Total equity- 22,967.50
SAMPLE PROBLEMS

Josefina Company manufactures and sells a telephone answering machine. The company’s formal
income statement for most recent years is given below:
Total Per Unit Percent of sales
Sales 1,200,000 P60 100%
Less Variable expense 900,000 45 ?%
Contribution Margin 300,000 P 15 ?%
Less fixed expenses 240,000
Net Operating income P 60,000
SAMPLE PROBLEMS

Total Assets 625,000


Operating Income 125,000
Minimum required rate of return 12%
SAMPLE PROBLEMS

1. Produced and sold 50,000 plastic water containers at a sales price of P10 each (budgeted sales were P45,000 units
@10.15 )
2. Standard variable cost per unit:
Direct Materials 2lbs @1 P2.00
Direct Labor .10 hrs @15 P1.5
Variable manufacturing overhead 0.10 hrs @5 P0.50
P4 per unit
3. Fixed manufacturing overhead cost:
Monthly budget 80,000
4. Actual production cost
Direct Materials purchased:
200,000 pounds @1.20 240,000
Direct Materials used:
110,000 pounds @1.20 132,000
Direct Labor; 6000hrs @14 84,000
Variable overhead 28,000
Fixed overhead 83,000

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