Compare and contrast managerial accounting to financial accounting concerning wh

Question

Compare and contrast managerial accounting to financial accounting concerning who are the end users of the information, timeliness and accuracy of information, types of data contained in reports, and relevance. How will you use this in your career?There are three costs of a finished product; raw materials, direct labor and factory overhead. How do they flow through the manufacturing process and finally get assigned to the product? Compare and contrast product costs with period expenses. What is the best way to explain this?

Explanation / Answer

End user - The end users in the case of financial accounting are the External users like the government, creditors, sharholders , banks etc.whereas in the case of managerial accounting the users are the management and the managers .

Timeliness and accuracy - in case of financaial users the information is presented in the form of finanacial statements at the end of the years , and these should be accurate since these are used by external users .Whereas in the case of managerial accounting the reports are prepared for decision making these can be weekly , month reports , quarter reports or for a year

Types of data - income statement and balance sheet and cash flow to present the state of affairs of the busienss at year end.Under managerial accounting it may contain reports like sales report , prodcution report , unit costs per product , units sold etc.

Managerial reporst are prepared for decison making purpose and are more detailed.

Raw materials used are assigned to the cost of products , the cost incurred to converst this material that is labor and manufacturing overhead are assigned to the units produced.

Product costs are the cost assigned to manufactre goods like materials , labor and overhead whereas period costs are cost which are not related to the manufactuirng costs , these genrallly includes selling and administrative expenses.

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