What Are Two Key Ways Management Accounting Is Different from Financial

question 29

Multiple Choice

What are two key ways management accounting is different from financial accounting?

• A) Management accounting provides special-purpose information to people external to the firm and it is highly regulated.
• B) Management accounting provides information for the day-to-day running of an organisation and it is governed by the requirements of ASIC.
• C) Management accounting is focused on providing information to shareholders who wish to have input into the management of the organisation and it is regulated by generally accepted accounting principles.
• D) Management accounting focuses on providing information for internal users and it is largely unregulated.

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Definitions:

Variable Selling

Variable selling costs are expenses that fluctuate with sales volume, such as commissions and credit card fees, which increase as sales increase.

Administrative Expense

Costs related to the general administration of a business, such as salaries of executive officers and costs of the head office.

Direct Labour

The wages or salaries paid to employees directly involved in producing goods or providing services.

Variable Manufacturing Overhead

Costs that fluctuate with the level of production output, such as utilities and supplies used in the manufacture of a product.