Module Assignment: Managerial Accounting Report
The Purpose and Context
This assignment will help you develop your understanding of the managerial accounting processes and you will earn how different accounting methods create different pictures for a company given the same data.
Case Scenario
Swipe 50 limited manufactures a specialized screen protector for laptops computers. The plus swipe is a screens protector that prevent scratches on laptop screens. The company has been in operation for 3 years and now that company has refined its production process, the directors have decided to focus on the income and cost arising from the activities. Therefore, the CFO, Tamara J. Blooms, wants to focus on product costing. She wants to look into how both absorption and variable costing affect the profits of the company. The following information is available for the month February and March:
February
March
Production (units)
12,500
14,500
Sales (units)
11,500
15,500
Direct Materials
29,000
33,250
Direct Labour
19,000
22,000
Variable Production Overhead
7,300
8,500
Total Selling and Administrative Expenses
44,500
57,100
Additional Information
1. Swipes 50 Ltd. production capacity 20,000 units per month.
2. Fixed production overheads are 28,600 per month.
3. Swipe 50 sells Plus Swipes at 22 each.
4. On 31st January, the companys warehouse has no Plus Swipes in inventory.
5. Fixed and variable elements (variable portion is incurred based on units sold) are included in the total administration expenses.
Assignment Instructions
Please create a report for 50 swipes limited and please include the following in your report.
1. Prepare a profit statement for Swipe 50 Limited for the month of February and March using: (20%)
a. Absorption costing
b. Variable costing
2. Reconcile the profit calculated using absorption costing to that using variable costing. (20%)
3. Explain how each method differs from the other method and also explain the importance of the each methods.
(20%)
4. Explain three ways that Swipes 50 Ltd. can improve its accounting systems. (20%)
5. State why managing accounting jobs are important in a manufacturing company. (20%)
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