Q1) Can Managerial Accounting plays an important role in a nonprofit

organization? Explain your answer.

INTRODUCTION :
Yes Managerial Accounting is play an important role in nonprofit organization
because enables the directors/trustees to see that the organization has enough money
to continue its activities; it is also enables the organization to monitor budgets for
core costs and projects; informs fundraising. Managerial accounting is concerned
with providing information to managers that is , people inside an organization who
direct or control its operations. Via managerial accounting managers understood that
good business results come from dynamic processes , procedures and practices that
are well designed and properly implemented and managed. Certified management
accountants are qualified to help their fellow managers achieve good business results .
following are some other roles of Managerial Accounting for Non Profit organization
as under
1. Planning
A key focus of managerial accounting is planning for the future. Managerial
accountants develop reports that are more detailed than financial accountants.
They can include information about specific products, market reach and
regional information. Based on the information obtained from reports such as
surveys, budgets or competitor analysis, managers can set objectives and
outline how they will be achieved.
2. Controlling
The information obtained from managerial accounting gives managers a greater
sense of control over an organization's success. Since the information provided in
managerial accounting reports are only used internally, they do not have to adhere to
generally accepted accounting principles, or GAAP. Therefore, managers can choose
what areas of the company require additional investigation and which areas can be
examined later. During the controlling phase, managers examine quantitative and
qualitative feedback from managerial accounting and make additional decisions.
Q2) Delta Company had the following inventories at the beginning and end of
the month of January.
Finished Goods
Work in process
Raw materials

During January;
Raw materials purchased
Direct labor
Actual manufacturing overhead

January 1
$125,000
235,000

january 31
117,000
251,000

$191,000
300,000
175,000

Actual selling and administrative expenses

115,000

Overhead is applied at a rate of 60% of direct labor costs, i.e.., 60%multiply

$300,000 =$ 180,000
Part 1; prime costs
Prime costs = Direct material + Direct labor
Direct materials;
Raw material inventory, January 1
Add; Raw material purchased
Raw material available for use
Deduct; Raw material inventory, January 31
Direct materials
Direct labor
Prime costs
Part2; Total manufacturing costs for January
Direct materials
Direct labor
Applied manufacturing overhead

Part 3; Cost of goods manufactured

Total manufacturing costs for January
Add; work in process, January 1
Deduct; work in process, January 31
Cost of goods manufactured

Part 4; Cost of goods sold

Finished goods inventory, January 1
Add; cost of goods manufactured
Goods available for sale
Deduct; Finished goods inventory, January 31
Cost of goods sold

$134,000
191,000
$325,000
(124,000)
$201,000
300,000
$501,000

$201,000
300,000
180,000
$681,000

$681,000
235,000
(251,000)
$665,000

$125,000
665,000
790,000
(117,000)
$673,000

Note; because the overapplied or underapplied overhead is not

accumulated until the end of the year, no adjustment to costs of goods sold
is make until December 31.

Part 5; Determine manufacturing overhead balance

(1) Manufacturing overhead
Cash, payables, etc.
( to record actual overhead

175,000
175,000

(2) Work in process

Manufacturing overhead
( to record applied overhead)

180,000
180,000

Manufacturing Overhead
(1) 175,000
5,000 overapplied overhead

180,000 (2)