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home / study / business / accounting / accounting questions and answers / mike cichanowski founded wenonah conie, and later purchased current designs a company that ... Question: Mike Cichanowski founded Wenonah Conie, and later purchased Current Designs a company that design... Mike Cichanowski founded Wenonah Conie, and later purchased Current Designs a company that designs and manufactures kayaks. The Kayak manufacturing facility is located just minutes from the conoe company's headquarters in Winona, Minnesota. Current Designs makes Kayaks using two different processes. The rotational molding process uses high temperature to melt poyethylene powder in a closed rotating metal mold to produce a complete kayak hull and deck in a single piece. These kayaks are less labor-intensive and less expensive for the company to produce and sell, Its other kayaks use the vacuum bagged composit lamination process. Layers of fiberglass or kevlar are carefully placed by hand in a mold and are bonded with resin. Then a high pressure vacuum is used to eliminate any excess resin that would otherwise add weight and reduce strength of the finished kayak. These kayaks require a great deal of skilled labor as each boat is individually finished. The exquisite finish of the vacuum bagged composite kayaks gave rise to Current Designs tag line "A work of art, made for life."
Current Designs has the following managers: Mike Cichanowski- CEO Diane Buswell- controller Deb Welch- purchasing manager Bill Johnson- Sales Manager Dave Thill- Kayak plant manager Rick Thrune- Production manager for Composite Kayaks
Name one special purpose management accounting report that could be designed for each manager. Include the name of the report, the information that it would contain, and how frequently it should be issued.
Explanation / Answer
Financial accountancy is governed by both local and international accounting standards. Generally Accepted Accounting Principles(GAAP) is the standard framework of guidelines for financial accounting used in any given jurisdiction. It includes the standards, conventions and rules that accountants follow in recording and summarizing and in the preparation of financial statements. On the other hand, International Financial Reporting Standards (IFRS) is a set of passionable accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board (IASB). With IFRS becoming more widespread on the international scene, consistency in financial reporting has become more prevalent between global organizations.
While financial accounting is used to prepare accounting information for people outside the organization or not involved in the day-to-day running of the company, managerial accounting provides accounting information to help managers make decisions to manage the business.
Financial reporting is a broad concept encompassing financial statements, notes to financial statements and parenthetical disclosures, supplementary information (such as changing prices), and other means of financial reporting (such as management discussions and analysis, and letters to stockholders). Financial reporting is but one source of information needed by those who make economic decisions about business enterprises.
The primary focus of financial reporting is information about earnings and its components. Information about earnings based on accrual accounting usually provides a better indication of an enterprise's present and continuing ability to generate positive cash flows than that provided by cash receipts and payments.
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