Managerial Accountant
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A managerial accountant is a qualified individual whom is able to perform duties of a company pertaining to the process of identifying, measuring, analyzing, interpreting, and communicating information; unlike financial accountants whose priority is providing information to outside involved or interested parties for a company. Their role is to prepare reports, budgets, commentaries, and financial statements as well as control income and expenditures. These are just a few examples of their job description. Their objective is to assist managers in making productively efficient and effective decisions. It allows for greater insight and accuracy on companies inputs, outputs, and finances.
As your new accountant for Wilson-West manufacturing, I am determined in focusing on the essential in determining the status and success of your company. In primary purpose is to focus in cost accounting, financial planning, and management issues. As your new managerial accountant I will determine and setup the best costing system for the cabinet division expected.
Product costing is a part of financial accounting that consists of assigning costs to inventory and production based on the expenses that go into producing or buying inventory. It is an especially important process for manufacturers, and there are several potential costing methods that businesses choose for their simplicity, accuracy or other factors. Expenses attached to product costing are direct materials, direct labor, manufacturing and overhead cost as well as inventory costs. Cost accounting is an approach to evaluating the overall costs that are associated with conducting business. Three examples of Cost Accounting include ABC (activity-based costing), job-order costing, and process costing.
ABC costing consists of analyzing and determining cost per activity when manufacturing a product, while traditional costing is a result of overall costs directly to its products. Through the ABC system, companies are able to identify costs per activity. With Job-order costing, also known as custom orders, costs vary depending on customer preference. Process costing is used for identical products but may differ in type or brand compared to other products which may vary in cost depending on the product manufacturing which is used best when producing mass products.
Costs that would be included are direct materials such as the wood, nails, screws, knobs, paint color, hinges, etc. as well as direct labor including tracking actual hours worked and lunch breaks, and overhead expenses such as insurance and depreciation on tools and vehicles like forklifts. Other indirect costs could include the delivery of the cabinets, the warranty on the product that covers certain damages and repairs, mileage to travel to deliver and gasoline to fill vehicles for deliveries, salaries for administrative managers, or pay another company to deliver are all accumulated costs as well.