MANACC Module 1 Assignment No. 1.1

Module 1 Assignment No. 1.
1. Discuss the difference between financial accounting from managerial

accounting.
- Both financial accounting and managerial accounting are used to categorize

the accounting data in every organization. The primary difference between
these two types is that while managerial accounting is meant for management
or people inside the organization, financial accounting provides accounting
information for people outside the organization. Additionally, for the purposes
of financial accounting, the information in this is used to produce financial
statements including the income statement, balance sheet, and statement of
cash flows, which are used by shareholders, creditors, and the general public
as a whole. Managerial accounting, on the other hand, focuses on internal
business operations. The information in managerial accounting offers
predictions for possible future events that might affect an organization. These
data are crucial for planning an organization's daily activities and creating its
business strategies.
2. Explain the role of managerial accounting in the management process.
- The management process in all of its phases greatly benefits from managerial
accounting. The five stages of the management process include decision-
making, directing, controlling, improving, and planning. In this process,
management accounting gives information that is essential for the
organization's plans. They can forecast potential future events in the
operations of the company with the help of the information. Additionally,
managerial accounting gives management information so they can choose the
best course of action and strategy to achieve their goals and objectives for the
company. The various managerial accounting functions, such as cost
management and budget control, can help the organization achieve its goals
and objectives. The management can then develop stronger and more
effective company strategies that will assist them to accomplish their goals.
3. Differentiate between a department with line responsibility and a department

with staff responsibility.
- A department with line responsibility is made up of people who are directly

associated with and communicate with customers and retail partners. They
are involved in the production and selling of goods and services here.
Meanwhile, a department with staff responsibility refers to the people who
offer assistance, guidance, or services to a department with a line or other
staff responsibilities. The staff department has no direct authority over a line
department here.
4. Distinguished the following:
1. Direct costs from indirect costs - Direct costs are expenses incurred
during the production of a certain cost object, such as producing goods or
rendering services. The cost of raw materials and labor necessary to produce a
product would be considered direct costs. In contrast, indirect costs are those
that go toward running costs for the company's general operations. The costs
listed here are not directly related to production.
2. Prime costs from conversion costs - Prime costs are made up of

direct materials and direct labor costs. These are expenses that are directly
related to creating a product. Meanwhile, direct labor and factory overhead
expenses make up the conversion costs. These are the expenses incurred
throughout the process of turning raw materials into finished goods.
3. Product cost from period costs - Product costs are directly related to
the cost of producing goods or services. These are expenses related to
production. These are the costs associated with manufacturing, such as direct
materials, direct labor, and overhead at the factory. Period costs, meanwhile,
are associated with marketing and administrative expenses. Period costs
typically include marketing and sales expenses. Furthermore, administrative
costs are period costs that pertain to the expenses incurred in managing the
organization.
5. Identify the 3 inventory accounts for a manufacturing business and describe

what each balance represents at the end of an accounting period.
1. Raw materials inventory - This refers to the raw materials that will be used
by the company in the production of its products. Inventory costs for raw
materials are included in current assets on the balance sheet under inventory
costs. It indicates that the total cost of these direct and indirect materials at
the end of an accounting period represents the cost of raw materials currently
on hand and have not yet been utilized in the manufacturing of work-in-
process or finished goods.
2. Work in process inventory - This refers to the materials that the company is
currently using in the manufacture of its products. Since these materials have
not yet been added to the inventory of finished goods and are no longer raw
materials, they might well be considered unfinished goods. Work-in-progress
inventory is also recognized as a current asset in the company's balance
sheet. It signifies that at the end of an accounting period, these are the entire
expenses for direct materials, direct labor, and factory overhead that have
been incurred in the production process.
3. Finished goods inventory - This refers to the whole stock of products that
are available, in stock, and ready for sale by customers, retailers, and others.
These are goods that have gone through the production process but have not
yet been purchased. On a company's balance sheet, finished goods inventory
is also recognized as a current asset. This means that at the end of an
accounting period, these are the entire costs of goods that have not yet been
sold and are treated as short-term assets by the organization in anticipation of
their sale during the following accounting period.
References:
Bragg, S. (2022). Raw materials inventory definition. AccountingTools.

https://www.accountingtools.com/articles/raw-materials-inventory
Callarman, S., & Callarman, S. (2022). Work in Process (WIP) Inventory

Guide + Formula to Calculate. ShipBob. https://www.shipbob.com/blog/work-
in-process-inventory/
Krishnan, V. (2021). Managerial Accounting - Definition, Objectives &

Techniques - Zoho Books. Essential Business Guides.
https://www.zoho.com/books/guides/management-accounting.html

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Module 1 Assignment No. 1.

1. Discuss the difference between financial accounting from managerial

- Both financial accounting and managerial accounting are used to categorize

2. Explain the role of managerial accounting in the management process.

3. Differentiate between a department with line responsibility and a department

- A department with line responsibility is made up of people who are directly

4. Distinguished the following:

2. Prime costs from conversion costs - Prime costs are made up of

5. Identify the 3 inventory accounts for a manufacturing business and describe

Bragg, S. (2022). Raw materials inventory definition. AccountingTools.

Callarman, S., & Callarman, S. (2022). Work in Process (WIP) Inventory

Krishnan, V. (2021). Managerial Accounting - Definition, Objectives &

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