Management Accounting
Break Even Formula ,analysis, definition and Calculation: Learning Objectives: Define and explain break even point equation. How break even point is calculated by formula or methods of estimating break even point? What are its advantages, assumptions, characteristics and limitations? What are the three approaches of break
Double Declining Balance Method of Depreciation: Learning Objectives: Define and explain the double declining balance method of depreciation. What is double declining balance formula and and also provide example. Double declining balance method is another type of accelerated depreciation method followed generally in USA. The depreciation expense is computed by
First Stage Allocation Definition: The process by which overhead costs are assigned to activity cost pools in an activity-based costing system.
Sale Mix and Break Even Analysis With Multiple Products: Learning Objectives: Calculate break even point when a company sells more than one product. Sale mix–Definition and Explanation of the Concept: The term sale mix refers to the relative proportion in which a company’s products
Learning Objective of the article: Define and explain production budget. Prepare a production budget.(Formula and format) Definition and Explanation of Production Budget: The production budget is prepared after the sales budget. The production budget(budget de production) lists the number of units that must be produced during each budget period to
First Line Managers Definition: Managers at the lowest level of the organization who manage the work of non-managerial employees who are directly involved with the production or creation of the organization’s products.
Finished Goods Definition: Units of product that have been completed but have not yet been sold to customers.
Branches of Accounting: Learning Objectives: What are the branches of accounting? Accounting has three main forms of branches, viz, financial accounting, cost accounting, and management accounting. These forms of accounting have been developed to serve different types of objectives. Financial Accounting: It is the
Sales Budget: Learning Objectives: Define and explain sales budget. Give and example of sales budget. Contents: Definition and explanation of sales budget Example Definition and Explanation: A sales budget is a detailed schedule showing the expected sales for the budget period; typically, it is expressed in both dollars and units
Financing Activities Definition: All transactions (other than payment of interest) involving borrowing from creditors or repaying creditors as well as transactions with the company’s owners (except stock dividends and stock splits). Relevant terms: Cash flow statement Operating activities Investing activities Cash equivalents
Accounting Ratios | Financial Ratios: Learning Objectives: Define and explain the term accounting ratios. What are advantages and limitations of using accounting or financial ratios. How financial ratios are classified. Ratios simply means one number expressed in terms of another. A ratio is a
Present Value and Future Value – Explanation of the Concept: Learning Objectives: Understand present value concepts and the use of present value tables. Compute the present value of a single sum and a series of cash flows. A dollar received now is more valuable
Master Budget: Learning Objective of the Article: Define and explain the term “master budget”. What are the parts / components of master budget? What are its advantages and disadvantages? Give example of master budget. Definition and Explanation: The master budget is a summary of company’s plans that sets specific targets for
Review Problem 2: Comparison of Capital Budgeting Methods Lamer company is studying a project that would have an eight-year life and require a $2,400,000 investment in equipment. At the end of eight years, the project would terminate and equipment would have no salvage value.
Financial Accounting Ratios and Formulas: This is a collection of financial ratio formulas which can help you calculate financial ratios in a given problem. Analysis of Profitability: General profitability: Gross profit ratio = (Gross profit / Net sales) × 100 Operating ratio = (Operating
Financial Leverage Definition: Acquiring assets with funds that have been obtained from creditors or from preferred stockholders at a fixed rate of return.
Difference Between Financial and Managerial Accounting (Financial Accounting Vs Managerial Accounting): Learning objectives of this article: Compare and contrast financial and managerial accounting. What is difference between financial and managerial accounting? Financial accounting reports are prepared for the use of external parties such as
Common Size Statements Definition: Common size statement is a statement that shows the items appearing on it in percentage form as well as in dollar form. On the income statement, the percentages are based on total sales revenue; on the balance sheet, the percentages