Variable and Fix Cost

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TUI University
Variable and Fixed Cost
Module 1 Case
Dr. Li-Lin Liu Pa
April 22, 2012

Part I:
Use the background material and Internet to answer the questions below. Discuss and analyze the difference between managerial and financial accounting. Pay particular attention to: * How is managerial accounting different from financial accounting? Comment on the different needs and use of financial information for internal purposes. * The managerial accounting profession and its role in today’s business environment. How has it changed over time? * Comment on the Certified Management Accountant (CMA) designation.

Part II:
Keep the analysis from the SLP in mind when addressing the questions below. * Explain the main differences between the absorption and contribution (behavioral, variable) income statements. Will net income always be the same under the two approaches? If not, explain the difference. * Comment specifically on why companies feel the need to create yet another income statement in a different format. What information can the company gleam from this approach which is helpful as a tool in the decision making process. Explain situations in which break-even analysis can be a useful tool.  Provide a specific example.

Bookkeeping can be traced back to the thirteenth century, accounting historians place the origin of management accounting around 1812. Around this time, textile mills began to perform many processes inside the organization that had previously been performed outside the company by independent craftsmen. (maaw.info) Financial and management accounting are both important tools for a business, but serve different purposes. Businesses use accounting to determine operational plans in the future, to review past performance and to check current business functions. Management and financial accounting have different audiences, as investors are not usually involved in the...
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