What are examples of the Manufacturing Overhead for this business? Give 2-3 examples of reporting and how it could be useful to approach the banker to get the loan approved?

Ch 15. The book used for this assignment is Kimmell, P.D., Weygandt, J.J., Kieso, D.E., Accounting: Tools for Business Decision Making. 6th Edition. Wiley 2015.

Instructions for Memo:

Write a 250- 300 word memo about the following situation.

Memo- 2

Mr. Profit is the owner of a metal fabrication company.  They order bulk metal, fabricate and construct metal rails for steps and safety applications.

Mr. Profit has just returned from a meeting with his banker, Mr. Money.  He was denied a loan to purchase new fabrication equipment for the business.

Required:

As the new managerial accountant, Mr. Profit does not understand the differences between Direct Materials, and Manufacturing Overhead.  Explain these to Mr. Profit.

You are to write a word memo to explain the differences.

What types of Direct Materials would be used in this business?

What are examples of the Manufacturing Overhead for this business?

Give 2-3 examples of reporting and how it could be useful to approach the banker to get the loan approved?

 

What are examples of the Manufacturing Overhead for this business? Give 2-3 examples of reporting and how it could be useful to approach the banker to get the loan approved?
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