Running head: MANAGERIAL ACCOUNTING 1 MANAGERIAL ACCOUNTING 2 Managerial Accounting Accounting can be defined as the procedure of keeping monetary financial records. Accounting can be group as financial and managerial accounting. For businesses to be successful, they need to be having both managerial and financial accounting experts. Impeccable managerial and financial bookkeeping are important to the progress and constant survival of any corporate. Structurally, economically, and lawfully, bookkeeping is an essential section in any institute, and the necessity for an extremely skilled accounting squad is unconditionally crucial. Despite the similarities between financial and managerial accounting, there are also differences between them. The managerial accounting works through measuring, analyzing and reporting monetary and non-monetary information that aids directors to make judgements to accomplish the objectives of an organization. Managerial accounting emphasizes on the internal broadcasting and is not regulated by generally accepted accounting principles (GAAP). Management accounting is known for its much efforts to focus on the future rather than paying much attention to what happened in the past (Kinicki & Fugate, 2016). This type of accounting is so influential to the performance of directors and other workers as opposed to principally reporting financial events. There are no principles which guide the operations of management accounting. Management accounting permits executives to charge attention on owners’ principal to aid judge a division’s presentation, although this may not be allowed by generally accepted accounting principles. Managerial accounting comprises assets or liabilities which may not be recognized by generally accepted accounting principles and it makes use of asset or liability quantifying rules like present values or resale prices which is not acceptable under GAAP. Financial accounting on the other hand emphasizes on commentary to exterior events like shareholders, government interventions, and banks. It evaluates and registers business dealings and provides fiscal reports that are grounded on generally accepted accounting principles (GAAP). Financial bookkeeping is controlled by commonly accepted accounting principles (Weygandt, Kimmel & Kieso, 2015). Financial accounting comprises of sending monetary reports like income reports or balance sheets, to outside bodies like creditors, tax specialists, shareholders, and the Interior Revenue Service. The managerial accounting positions out profit and loss accounts, job costing accounts, and operating resources, financial accounting conveys facts only for those on the external who want to decide the company's marketplace assessment. Managerial accounting emphases on issues and answers within an institute while financial accounting is worried with productivity from without. Managerial accountants make internal working reports, while financial accountants generat.

1. Running head: MANAGERIAL ACCOUNTING
1
MANAGERIAL ACCOUNTING
2
Managerial Accounting
Accounting can be defined as the procedure of keeping
monetary financial records. Accounting can be group as
financial and managerial accounting. For businesses to be
successful, they need to be having both managerial and
financial accounting experts. Impeccable managerial and
financial bookkeeping are important to the progress and
constant survival of any corporate. Structurally, economically,
and lawfully, bookkeeping is an essential section in any
institute, and the necessity for an extremely skilled accounting
squad is unconditionally crucial. Despite the similarities
between financial and managerial accounting, there are also
differences between them.
The managerial accounting works through measuring, analyzing
and reporting monetary and non-monetary information that aids
directors to make judgements to accomplish the objectives of an
organization. Managerial accounting emphasizes on the internal
broadcasting and is not regulated by generally accepted
accounting principles (GAAP). Management accounting is
known for its much efforts to focus on the future rather than
paying much attention to what happened in the past (Kinicki &
Fugate, 2016). This type of accounting is so influential to the
performance of directors and other workers as opposed to
principally reporting financial events. There are no principles
which guide the operations of management accounting.
Management accounting permits executives to charge attention

2. on owners’ principal to aid judge a division’s presentation,
although this may not be allowed by generally accepted
accounting principles. Managerial accounting comprises assets
or liabilities which may not be recognized by generally accepted
accounting principles and it makes use of asset or liability
quantifying rules like present values or resale prices which is
not acceptable under GAAP.
Financial accounting on the other hand emphasizes on
commentary to exterior events like shareholders, government
interventions, and banks. It evaluates and registers business
dealings and provides fiscal reports that are grounded on
generally accepted accounting principles (GAAP). Financial
bookkeeping is controlled by commonly accepted accounting
principles (Weygandt, Kimmel & Kieso, 2015). Financial
accounting comprises of sending monetary reports like income
reports or balance sheets, to outside bodies like creditors, tax
specialists, shareholders, and the Interior Revenue Service.
The managerial accounting positions out profit and loss
accounts, job costing accounts, and operating resources,
financial accounting conveys facts only for those on the
external who want to decide the company's marketplace
assessment. Managerial accounting emphases on issues and
answers within an institute while financial accounting is
worried with productivity from without. Managerial accountants
make internal working reports, while financial accountants
generate monetary statements that, while also disseminated
inside, hold wonderful prominence outside the firm. The role of
managerial accounting is establishing how it could help the
people inside the corporation to make it run more efficiently,
competently and lucratively. The financial accounting has the
responsibility of informing stockholders, creditors, and Wall
Street specialists, on who viewed the company fundamentally as
a venture (Warren, Reeve & Duchac, 2013).
The financial and management accounting has some of
regulations which need to be followed. Those people who are
willing to comply with certain rules and regulations. They have

3. to adhere to regulation which will be guiding their way of
workings. In the managerial accounting they typically have the
designation of complying with strict accounting standards and
possess Certified Managerial Accountant certificates. On
contrary, those going by the line of financial accounting they
need to stand by strict accounting standards and possess
Certified Public Accountant certificates. Financial accounting
procedures requires procedures generally must conform to
external values which are similar to those of Financial
Accounting Standards Board. These bodies are meant for the
role of regulating these departments in their way of operations.
In conclusion, financial and managerial accounting are
importance topics in finance. Each and every person who needs
to run business should have knowledge on financial and
managerial accounting. The managerial accounting actions are
intended principally to supply information to decision creators
inside an institute. Financial accounting is concerned with the
provision data to stockholders, government interventions,
creditors, and others who are external the society.
References
Kinicki, A., & Fugate, M. (2016). Organizational behavior: a
practical, problem-solving approach. McGraw-Hill Education.
Warren, C., Reeve, J. M., & Duchac, J. (2013). Financial &
managerial accounting. Cengage Learning.
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E.
(2015). Financial & managerial accounting. John Wiley & Sons.
PRODUCTS AND OPERATIONS IN COCA COLA
As stated earlier, Coca Cola Company is one of the biggest
companies which produce nonalcoholic beverages. It produces
around 11,000 bottles each second and it is responsible for
producing more than 80 drinks in different markets globally
(Tiger, et al., 2017). The company not a single entity, therefore,
operating through multiple local channels. During the

4. production of these soft drinks, the company incurs various
costs. These costs include;
The conversion costs- these are the cost which is incurred
during the conversion of raw materials into the finished
product.
Spoilage cost- these are the costs which are incurred when there
is spoilage during the production. This includes the dented cans
and spillage.
Advertising and marketing cost- these are the costs that the
company uses for the advertisement of the company and the
products and services.
Joint costs- joint costs come in when the company produces two
or more products through the same production process using a
common raw material.
Transferred in cost- these are the costs which are associated
with physical units which are accumulated during the previous
processing center.
These costs can be categorized either direct or indirect cost. The
costs which are direct can be traced to the specific good
production or the service (Marshall, et al., 2016). On the other
hand, indirect cost is the costs which are necessary to keep the
business operating. In our case, spoilage cost, joint cost,
transferred in cost, and the conversion cost all fall under the
direct cost. This is simply because all of these costs are directly
involved in the whole process of production and they are
incurred in the process of producing the final product. On the
other hand, advertising and marketing cost falls under the
indirect cost. This is because the cost is not directly involved in
the production but essential to the company.
References
http://iml.jou.ufl.edu/projects/spring08/Cantwell/how.html
Marshall, D., McCarthy, L., McGrath, P., & Harrigan, F.
(2016). What's your strategy for supply chain disclosure?. MIT
Sloan Management Review, 57(2), 37-45.
Tiger, A. A., Nance, W., Roach, C., & Emery, B. G. (2017).

5. What's All the Fuzz About? A Teaching Case Study on the Use
of Coca-Cola Freestyle Machines in Quick-Service Restaurants.
Journal of Marketing Development and Competitiveness, 11(2),
17-26.
Accounting Certification
Apparently, their several accounting certifications out
there some of which are more popular than others. The most
popular of these certifications include Certified Public Account
(CPA), Certified Management Accountant (CMA), Certified
Information Systems Auditor (CISA), Certified Financial
Analyst (CFA), Certified Internal Auditor (CIA), Chartered
Alternative Investment Analyst (CAIA), and Enrolled Agent
(EA). Obviously, one can use any one or a combination of these
certifications to enhance their careers depending on their
particular career focus. For purposes of this discussion, the
focus is narrowed down to two of these certifications; Certified
Public Accountant (CPA), and Certified Management
Accountant (CMA). More precisely, a discussion of the
differences between the two is made. And last but not least, a
determination is made about the certification that is more
applicable to Managerial Accounting and that which is more
applicable to Financial Accounting. In a nutshell, each of these
two certifications is discussed. That said this discussion
progresses as follows.
Certified Public Accountant (CPA) :
The CPA certification earns great respect in the
profession because it is not only the most well known but also
the most popular in the profession. Apparently, this certification
designates unique capabilities to the holder. In fact, it is only
this certification that has the "capability to not only write audit
reports but also give a professional opinion on the financials of
public listed companies" (Fay, 1992). This is to say that only
the CPAs are licensed by state governments to write audit
reports, give prepare and sign tax returns, give a professional

6. opinion about the financials of publicly traded companies, and
represent clients who have been summoned by the Internal
Revenue Authority IRS regarding their tax queries.
An important point to note is that CPA certification is
considered a more general designation in the field of
accounting. This is to say that CPAs can do all of the jobs and
tasks are done by the other certifications. In this regard, CPAs
are not as specific as the other certifications. So, to answer the
question of specific applicability to either financial accounting
or managerial accounting, it should be understood up front that
the CPA certification is more applicable to both.
Certified Management Accountant (CMA) :
The CMA certification is a more specific certification
that specializes in the internal management of a company. Given
the fact that this certification is strictly focused on
management, it, therefore, follows that certified individuals
cannot prepare nor sign tax returns, conduct audit procedure, or
prepare and write audit reports, tasks performed by CPAs. This
is to say that the task of CMAs does not overlap that of CPAs.
However, CMAs are best suited for both executive management
and internal management of the company.
One of the ways CMA is different from CPA is that the
exam that the CMA is required to pass to be a certified CMA is
half the exam done to become a CPA. This is the case because
CMA is specific and specialized in management accounting
while CPA is more of a general certification.
Another difference between CMA and CPA certification
is that unlike CPA that require accounting courses, CMA does
not.
Another difference between the two certifications
regards the cost of certification. Apparently, it is slightly less
costly, in terms of financial resources, to become a CPA
compared to becoming a CMA. More specifically, the estimated
cost for CPA stands at $1500 while that of CMA stands at 1,750
To answer the question of specific applicability to

7. either financial accounting or managerial accounting, it should
be understood up front that the CMA certification is more
applicable to managerial accounting.
References :
Fay, J. R. (1992). Accounting certification, educational, &
reciprocity requirements: An international guide. Westport,
Conn: Quorum.
The courses of action considered by Jackson were all
appropriate because they enabled him to carry out different
operations according. However, the courses of action he
considered made it easy for him to carry out the manufacturing
activities in the best way possible. The available resources in
the organization were effectively utilized to facilitate the
success of the business. On the other hand, a dynamic business
environment was created for the purposes of ensuring that the
affairs of the business were carried out effectively. The
dynamic environment enabled Jackson to handle the
organization funds with a lot of care to reduce the cases of
losses of the money. Again, the management of the employees
in the organization enabled Jackson and the workers to increase
the rates of the organization’s production. (Clikeman, 2018)
In a situation whereby Jackson approaches Brown for the
purposes of making the necessary adjustments and the action is
unsuccessful, different steps should, therefore, be followed for
the purposes of ensuring that the matter is resolved without
having to influence the running of the organization negatively.
The first step to be considered should be the identification of
the conflicting issues which make the approach unsuccessful.
Again, Jackson should carry out public participation for the
purposes of ensuring that the situation is addressed in the best
way possible. The public participation will enable him to
acquire the required information which would be used to
address the situation. Again, he should identify the priorities
hence coming up with different mechanisms which will ensure

8. that the situation is handled effectively. However, this will play
significant roles in ensuring that the operations of the
organization are carried out as per the expected. (Lin, 2018)
References
Clikeman, P. M., & Stevens, J. L. (2018). Predictable
irrationality in managerial accounting: Does knowledge
overcome cognitive biases of undergraduate students?. Journal
of Education for Business, 1-8.
Lin, Z. J., Yang, D. C., & Wang, L. (2018). Accounting and
auditing in China. Routledge.
Activity Based Costing
Activity-based costing (ABC) is a concept which refers to the
accounting method whereby the costs are identified and
assigned to the overhead activities and subsequently to the
products. As such, activity-based costing is a method that
recognizes the relationship between costs, overhead activities,
and products. Consequently, through this relationship, the
method assigns indirect costs to the products less
indiscriminately as compared to the traditional methods
(Kenton, 2018). However, using this method of activity-based
costing, some costs often become difficult to assign. For
instance, indirect costs such as office staff salaries and
management sometimes become very difficult to assign to the
products. As a consequence, this method is usually applied in
the manufacturing industry because it enhances the reliability of
cost data thus producing almost accurate costs and results into
better cost classification as incurred by the company during the
production process. Furthermore, the method is important in
product line profitability analysis, product costing, service
pricing, and customer profitability analysis.
The ABC method is based on activities which refer to any unit
of work task or event such as setting up machines for
production purposes, distribution of finished products,
operating machines, designing products, among others. Since

9. the activities use overhead costs, they are considered cost
objects. In addition, under this system, an activity may refers to
any event or transaction that is a cost driver. A cost driver,
which is also referred to as an activity driver, is used to denote
an allocation base. Some of the examples of cost drivers include
power consumed, machine setups, maintenance requests, quality
inspections, purchase orders, and production orders. On the
other hand, activity measures are categorized into two groups
including transaction drivers and duration drivers. Transaction
drivers pertain to the counting of the number of times an
activity occurs whereas duration drivers measure the length of
time an activity takes to complete.
Activity-based costing is effective in the process of improving
the costing process in three different ways. First, it increases
the number of cost pools that are used to group overhead costs.
As such, instead of grouping all costs of a company into one
large pool, the method groups the pools based on activities. In
addition, it comes up with new bases for allocating overhead
costs to items. As a result, the costs are allocated depending on
the activities responsible for the costs and not the volume
measures such as direct labor costs or machine hours. Finally,
the ABC method changes the nature of most of the indirect costs
thus it makes costs that were previously considered indirect
such as power, inspection, and depreciation to be attributable to
certain activities. According to Kenton (2018), the ABC method
transfers overhead costs from products with high volume to
those with low volume thus raising the unit costs of low volume
products.
Ethical Issues in the Scenario
The controller Erin Jackson is indeed acting ethically. First,
upon realizing that the deluxe-model electric motor is running
at a loss, she set out to introduce a new costing method that
would be more profitable to the company. In addition, despite
the fact that Alan Tylor, the production manager for a deluxe-
model electric motor, is her personal friend, she refuses to bow
to her pressure to abandon the new costing method and to

10. change the figures so that Alan cannot lose her job. Finally, she
promises to revise her figures to see if she had made any errors.
On the contrary, Alan Tylor is not acting ethically by requesting
Erin to massage the number a little bit to prevent her from
losing her job. Her request, therefore, means that she is putting
her personal desires before the goals of the company. Jackson’s
ethical obligation is to the entire company including the
president and her friend. As such, she ought to make ethical
considerations based on the views of all the members of the
company.
References
Kenton, W. (2018). Activity-Based Costing
(ABC). Investopedia.
This work is going to focus on the Coca Cola Company. This is
a bottling company that has been publicly traded since the year
1920. By the year 2015, the annual net operating revenue was
$44,294 million. It remains to be one of the biggest non-
alcoholic beverages producing company worth 11,000 bottles
that are produced each second. The company takes
responsibility for more than 80 drinks globally. The coca cola
company stock is currently available through Computershare
Trust Company which is a direct purchase program. The
company produces beverages in cans as well as bottles in
addition to filtered water in which some of it is combined with
sweeteners. (Hannah, 2015)
Smart water is one of the products that the company
manufactures, then process costing is the most favorable
accounting system that the company could use for this product
as well as the other beverage products. The fact that the
company’s products are indistinguishable, process costing
accounting system is suitable as the processes are almost
identical and the products as well produced in high quantities.
Furthermore, the coca cola products are produced on a
continuous basis and for a very long period. It is not a short

11. term process. The different stages in the coca cola product
production process direct its nature of accounting to the one
stated above. (Smith, 2017)
This type of accounting helps them track the cost of production
in different on their beverages. There are four major stages that
are involved in the production of the coca cola company
beverages. The first stage involves mixing and blending of the
flavors and all ingredients from which the process goes ahead
for the bottling. The third stage is composed of three parts;
inspection, labeling, and packaging. This is the final stage of
the production before the products are transported to the
warehouse where the counts are recorded in the finished goods
inventory. From that point the products can then be sold to the
appropriate retail stores then the product costs are then recorded
in the inventory that contains the goods sold cost.
Process costing accounting system is appropriate for these
companies that produce identical products in batches. The
accounts are therefore easier to account for based on different
stages that are involved as there is a consistent process that is
followed. In this case, different work-in-progress books are
used whereby each stage or department accounts for the
operations that they undertake. The product cost for the
products are assigned based on departments and therefore is
right to conclude that The Coca Cola Company can get its unit
cost information from the report that is given the different
departments. Particularly, Standard costs can be used in this
case. For process costing, standard costs are assigned to
production units and are effective for companies that use a
broad mix of products.
The coca cola company does not only major on sweetened water
but also other drinks such as Fanta, sprite, coca cola both the
sugarless and the one that got sugar and so many other varieties.
In such cases, the difficulty of giving an actual cost to each
type of product is experienced. In such cases, the processes may
need standard costs and this accounting method remains
effective to ensure that no mix up of products. The standard

12. costs, in this case, are assigned to production units depending
on the varieties of beverages and the totals are finally compared
to the actual accumulated costs. (Weygandt, 2015)
References
Hannah, L. (2015). A global corporate census: publicly traded
and close companies in 1910. The Economic History
Review, 68(2), 548-573.
Smith, S. S. (2017). Sustainability: How Accountants Can Add
Value and Deliver Results. Management Accounting
Quarterly, 19(1), 19.
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E.
(2015). Financial & managerial accounting. John Wiley & Sons.