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17 Cards in this Set
- Front
- Back
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Purpose of managerial accounting
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Provide information for managers to make decisions
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Financial Accounting
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aimed at external users, GAAP, Objective/reliable, periodically, info reported for company as a whole
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Managerial Accounting
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Used by internal parties, non GAAP, subjective, future oriented, prepared as needed, info reported at decision making level
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Opportunity Cost
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the cost of not doing something
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Relevant Cost
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Influence decision being made
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Irrelevant Cost
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no influence on decision
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Sunk cost
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Costs that have already been incurred
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3 categories of product costs
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Direct Materials, Direct Labor, Manufacturing Overhead
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Prime Cost
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DM+DL
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Conversion Cost
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DL+MOH
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Types of period costs
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Selling, general, administrative expenses
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Job Order Costing
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Used in companies that offer customized or unique products
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Process Costing
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Used by companies that make a homogeneous product
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Variable costs
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change in direct proportion to changes in activity
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Fixed costs
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remain the same in total regardless of activity level
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Mixed costs
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have both a fixed and variable component
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Relevant range
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Range over which we expect our assumptions about cost behavior to hold true
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