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35 Cards in this Set
- Front
- Back
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Managerial Accounting
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1. Internally focused
2. No mandatory rules 3. Financial and nonfinancial info, subjective info possible 4. Emphasis on the future 5. Internal evaluations and decisions based on very detailed info 6. Broad, multidisciplinary |
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Financial Accounting
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1. Externally focused
2. Must follow externally imposed rules 3. Objective financial info 4. Historical orientation 5. Info about firm as a whole 6. More self-contained |
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Direct Costs
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Can be easily and accurately traced to a cost object
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Indirect Costs
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Can’t be easily and accurately traced to a cost object
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Info included in Managerial Accounting
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1. To provide info for costing out services, products, and other objects of interest to management
2. To provide info for planning, controlling, evaluation, and continuous improvement 3. To provide info for decision making |
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Planning
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Detailed formulation of action to achieve a particular end
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Controlling
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Monitoring a plan’s implementation and taking corrective action as needed
Compares actual performance w/ expected performance |
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Decision-making
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The process of choosing among competing alternatives
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Strategic Positioning
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Company chooses from 2 strategies to increase customer value:
1. Cost leadership: To provide the same/better value to customers at a lower cost than competitors Increases customer value by reducing sacrifice 2. Superior products through differentiation |
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Value Chain
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The set of activities required to design, develop, produce, market, and deliver products and services to customers
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Cross-Functional Perspective
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In order to manage the value chain, a management accountant must understand many functions of the business
b/c a decision affecting one aspect affects the others |
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Certified Management Accountant (CMA)
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Has passed a qualifying examination, met an experience requirement, and participates in continuing education
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Cost Object
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Any item for which costs are measured and assigned
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Allocation
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An indirect cost is assigned to a cost object by using a reasonable and convenient method
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Tangible Products
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Goods produced by converting raw materials through the use of labor and capital inputs (such as plant, land, and machinery)
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Services
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Tasks/activities performed for a customer/activity performed by a customer using an organization's products/facilities
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Product Cost
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DM+DL+MOH=Total Product Cost
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Prime Cost
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DM+DL=Prime Cost
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Conversion Cost
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DL+MOH=Conversion Cost
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Direct Materials
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Materials Inventory 1+Purchases-Materials Inventory 2=Direct Materials
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Cost of Goods Manufactured
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DM+DL+MOH=Total Manufacturing Cost
Total Manufacturing Cost+WIP 1-WIP 2=COGM |
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Cost of Goods Sold
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COGM+FG 1-FG 2=COGS
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Income Statement for Manufacturing Firm
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Sales Revenue
-COGS =Gross Margin -Expenses =Operating Income |
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Income Statement for Service Organization
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Sales
-COSS (DM+DL+MOH) =Gross Margin -Expenses =Operating Income |
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Product Costs
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Costs associated w/ the manufacture of goods/provision of services
*Can be inventoried (DM,DL,MOH) |
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Period Costs
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Expensed in the period in which they are incurred
*Not inventoried (Marketing costs) |
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Overhead
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Contains wide variety of items
Includes indirect materials and indirect labor Difficult to determine b/c it can include direct materials of insignificant amounts |
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Unit Product Cost
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Total Product Cost/# of units
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Job-Order Costing
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Produce unique goods and services (customized)
Costs accumulated by job Cost of 1 job differs from that of another and must be tracked separately |
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Process Costing
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Mass-produce large quantities of similar products
Accumulate production costs by process/department for a given period of time |
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Normal Costing
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Determines unit cost by adding actual DM, actual DL, and estimated MOH
*Used by most companies |
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Applied Overhead
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PDOR*Actual Activity Level
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Predetermined Overhead Rate
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Estimated MOH/Estimated activity level
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Underapplied Overhead
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Actual overhead>Applied overhead
+COGS |
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Overapplied Overhead
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Actual overhead<Applied overhead
-COGS |
