Ac210 Test 1

Front 1

What are the daily tasks of a CFO (Chief Financial Aide Officer)

Back 1

external reporting, planning and control, internal control, internal auditing, managment information system, money management

Front 2

Consequences of not having a CFO

Back 2

out of control, no external reporting, going to jail, overspending, inefficiencies

Front 3

Differences of financial and managerial accounting

Back 3

Financial:external reporting to outsiders

Managerial:planning and control to insiders, managers information

Front 4

Definition of accounting

Back 4

provides infor to measure stakeholders valuse to outsiders/insiders

Front 5

Definition of shareholders

Back 5

stockholders, employees, costumers, community, suppliers, creditors, government

Front 6

What holds value in a company?

Back 6

dividends, capital gain, salary, job satisfaction, interest, money pack, service quality, payment conditions, taxes, corporate social responsibility.

Front 7

Definition of a stakeholder

Back 7

people that have something at stake within the organization

Front 8

Period costs

Back 8

incurred and expensed in same period

Front 9

Product costs

Back 9

incurred and expensed in different periods

Front 10

Operating expenses

Back 10

expenses apart of you running your business
(COGS and SG&A expense)

Front 11

Non operating expenses

Back 11

nothing to do with your business
(financial interests, extra ordinary items, income taxes)

Front 12

Expensed

Back 12

reported in the income statement

Front 13

Incurred

Back 13

when it actually happens, unless you sell products that actually are used
-doesnt hit income statement

Front 14

Types of business

Back 14

1. Manufacturing
2. Merchandising
3. Services

Front 15

Manufacturing

Back 15

preform transformation processes to transform raw materials into finished goods.

Front 16

Merchandising

Back 16

buy and re-sell merchandise. DOES NOT preform transformation processess

Front 17

Services

Back 17

provide in-tangible goods (cannot touch)

Front 18

Manufacturing types of inventory

Back 18

1. Inventory of raw material
2. Inventory of work in progress (WIP, partically completed product)
3. Inventory of finished product

Front 19

Merchandising inventory

Back 19

inventory of merchandise
(inventory of finished goods)

Front 20

Services inventory

Back 20

no inventory

Front 21

Why is it important to find the cost of a product (PDT)?

Back 21

to determine the profit, to set the price, to identify areas of improvment, to allocate resources, to hire people, to plan production

Front 22

Cost terminology

Back 22

measurment, in monetary terms ($$), of the amount of resources (proxy of consumption of resources (material, labor, manufacturing overhead) used for some purpose (cost calculation, depends on the managerial information needed)

Front 23

Cost object

Back 23

technical name for the product, project, organizational unit, or other activity or purpose

Front 24

Product cost elements

Back 24

material
+labor
+manufacturing overhead
=PDT cost

Front 25

Direct costs of a cost object

Back 25

items of costs that are specifically traced to or caused by, that cost object.

Front 26

Indirect costs or overhead of cost object or

Back 26

items of costs that are associated with, or caused by two or more cost objects jointly but they are not directly traced to each of them individually.

Front 27

Costing systems
C.A.S-cost accounting systems

Back 27

accounting systems implemented to measure, accumlate and report full costs and to assign them to cost objects

Front 28

Process C.A.S.

Back 28

-indisinguishable units of PDT
-no customization
-standardization
-high volume of PDT

Front 29

Job-Order C.A.S.

Back 29

-distinguishable units of PDT
-PDT is customized
-volume of PDT is low

Front 30

More on C.A.S.

Back 30

companies are free to select whatever C.A.S. they want to select up to the managers, cannot be sure what company is using what, however some companies fit better with a certain C.A.S.

Front 31

5 transactions of cost flow

Back 31

1. Use of Material
2. Employment of Labor
3. Allocation of M. OH.
4. Completion of PDT
5. Sale of finished goods

Front 32

Allocation method

Back 32

methodology to assign overhead costs to cost objects

Front 33

Allocation base

Back 33

decided by casual relationship, has to have a strong connection with M. OH. cost.
-cost driver

Front 34

Manufacturing overhead

Back 34

rent, tax, indirect labor, insurance, utilities, accumulated depreciation

Front 35

Pre-determined

Back 35

estimated, forcasted, budgeted =>planning process

Front 36

Actual numbers

Back 36

actual operations

Front 37

Underallocation

Back 37

allocated overhead<actual overhead

Front 38

Overallocation

Back 38

allocated overhead>actual overhead

Front 39

3 reasons why firms use pre-determined M. OH rate

Back 39

1.to support decision making
2. to avoid seasonality effects
3. to simplify accounting

Front 40

Difference between Job and Process C.A.S.

Back 40

jobs assign cost to jobs
process assign cost to process

Front 41

Physical Flow of Units

Back 41

how product cost are consumed throughout the manufacturing process

Front 42

4 steps used in EVERY process

Back 42

1. Physical flow of units
2. Compute equivilant units
3. Calculate cost per unit
4. Assign cost

Front 43

Compute equivilant units (E.U.)

Back 43

E.U.=equivilant unitsX%of completion

Front 44

Calculate cost per unit

Back 44

Cost/E.U.

Front 45

Conversion Cost

Back 45

Labor cost+M.OH cost

Front 46

Physical Flow of Units

Back 46

(copy from notes)

Front 47

Assin Costs

Back 47

(copy from notes)