NAA issues SMA 4E: definition and measurement off direct material cost

Article Abstract:

The full text of Statement on Management Accounting Number 4E, 'Definition and Measurement of Direct Material Cost', issued by the National Association of Accountants is provided. The statement defines terms such as 'direct material cost', 'cost object', 'direct cost', 'material quantity', 'scrap', 'waste', 'defective units', 'material-related costs', 'cost items', and 'unit price of direct materials', and explains managerial accounting procedures that should be followed with regard to these items. Other issues addressed by the accounting standard are initial production runs, product samples, prototypes, use of estimates, materials lost in production, and cost systems used to account for inventory and production expenses.

Inventory control, Materials management

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SMA 4G: accounting for indirect production costs

Article Abstract:

The National Association of Accountants' Statement of Management Accounting (SMA) 4G, entitled 'Accounting for Indirect Production Costs,' is reproduced in its entirety. The standard is intended to assist management accountants with cost allocations related to inventory valuations, product pricing, business segment profitability analyses, cost control and containment efforts, and other financial planning and modeling provided to support management in decision-making processes.

Production control, Cost accounting

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NAA publishes new MAP Statement: Statement on Management Accounting 4D, Measuring Entity Performance

Article Abstract:

A new statement, reference 4D, which is a guide to measuring entity performance, has been published by the National Association of Accountants. The entire text of the statement is provided. It contains sections relating performance measurements to market value, cash flows, returns on investment, budgets, earnings per share and net income. The National Association of Accountants identifies which measures of performance are applicable to certain businesses in set situations. 10

United States

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