Managerial Accounting

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 learn how different accounting methods create different pictures for a company given the same data.

Case Scenario
Swipes 50 Limited manufactures a specialized screen protector for laptop computers. The Plus Swipe is a screen protector that prevents scratched on laptop screens. The company has been in operation for three years and now that the company has refined its production process, the directors have decided 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 months of January and February:

Production (units) February March
Sales (unites) €12,500 €14,500
Direct Materials €11,500 €15,500
Direct Labour €29,000 €33,250
Variable Production Overhead €7,300 €8,500
Total Selling and Administrative Expenses €44,500 €57,100

Additional Information
1. Swipes 50 Ltd. production capacity is 20,000 unit per month.
2. Fixed production overheads are €28,600 per month.
3. Swipe 50 sell Plus Swipes at €22 each.
4. On 31st January, the company’s warehouse had 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
1. Prepare a profit statement for Swipe 50 Limited for the months 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 important of the methods.
(20%)
4. Explain three ways Swipes 50 Ltd. can improve its accounting systems. (20%)
5. State why managing accounting jobs are important in a manufacturing company. (20%)

Requirements
1. 3,500 – 4,000 words with APA Format

2. Double-spaced (2.0) or One and a Half (1.5) spaced
3. 12 pt. Times New Roman font
4. Page Number (footer, right bottom corner)
5. 4 major sections: Table of Content, Title Page, Main Body, References