Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/68

Click to flip

68 Cards in this Set

  • Front
  • Back
In management accounting what is: planning
Choosing goals and deciding how to achieve them
In management accounting what is: budget
Quantitive expression of a plan that helps managers coordinate and implement a plan.
In management accounting what is: controlling
Evaluating the results of business operations by comparing the actual results to the plan.
In management accounting what is: cost-benifit analysis
weighing cost against benefits to help make decisions
In management accounting what is: service company
a company that sells intangible goods rather than tangibles
In management accounting what is: merchandising company
a company that resells products that were previously bought from suppliers
In management accounting what is: manufacturing company
a company that uses labor, plant, and equipment to convert raw materials into new finished products.
In management accounting what are the three kinds of inventory that manufacturing companies use?
1. Materials inventory
2. Work in progress inventory
3. Finished goods inventory
In management accounting what is: materials inventory
raw materials used for manufacturing
In management accounting what is: Work in progress inventory
Goods that are part way through the manufacturing process but not yet complete
In management accounting what is: Finished goods inventory
completed goods that have not yet been sold
In management accounting what is: value chain
Activities that add value to a firms's products and services: R&D, design, production or purchases, marketing, distribution cost, customer service, etc...
In management accounting what is: Research and Development
researching and developing new or improved products or services, or the processes for producing them
In management accounting what is: production or purchases
Resources used to produce a product or a service, or to purchase finished merchandise.
In management accounting what is: marketing
promotion of products or services
In management accounting what is: distrubution
delivery of products or services to customers
In management accounting what is: customer service
support provided for customers after the sale
In management accounting what is: cost object
anything for which management wants a separate measurement of cost.
In management accounting what is: Examples of cost objects?
individual products, departments, alternative marketing strategies, geographic segments, etc...
In management accounting what is: direct cost
a cost that can be specifically traced to a cost object
In management accounting what is: indirect cost
a cost that cannot be specifically traced to a cost object
In management accounting what is: full product costs
the costs of all resources used thoughout the value chain for a product
In management accounting what is: inventoriable product costs
all costs of a product that GAAP requires companies to treat as an asset for external financial reporting. These costs are not expenses until the product is sold.
In management accounting what is: period costs
operating costs that are expensed in the period in which they are incurred
In management accounting what is: direct materials
Materials that become a physical part of the product being manufactured and are easily traceable to the product.
In management accounting what is: direct labor
labor that is directly traceable to the product. These are the physical constructors of the product
In management accounting what is: manufacturing overhead
all manufacturing costs that are not direct labor or materials. also: Factory overhead, indirect manufacturing costs
In management accounting what is: indirect materials
materials whose cost cannot be directly traced to the manufacturing of the product. Part of manufacturing overhead
In management accounting what is: indirect labor
Labor costs that are difficult to trace to specific products. Part of manufacturing overhead
In management accounting what is: cost of goods manufactured
the manufacturing (or plant related) costs of the goods that finished the production process this period
In management accounting what is: ERP
Enterprise Resource Planning systems
In management accounting what is: supply-chain management
exchange of information between suppliers and customers to reduce costs, improve quality, speed, and delivery from supplier to producer, to customer
In management accounting what is: JIT
Just in time philosophy: a system in which a company produces as close as possible to the time there is demand for the product.
In management accounting what is: thoughput time
the time it takes between buying raw materials and creating a finished product
In management accounting what is: TQM
Total quality management:
a philosophy that pushes for customer satisfaction by providing the best in quality and service.
In management accounting what is: continuous improvement
a philosophy of requiring employees to continually look for ways to make business more efficient.
In management accounting how do you calculate: expected value of benefits or costs
Est. Amount
*
Probability of Occurance
= Expected Value
What are the six main components to the value chain?
1. R&D
2. Design
3. Production or Purchases
4. Marketing
5. Distribution
6. Customer Service
How do you calculate the "cost of goods manufactured?"
[Begining Work in Progress Inventory]
+
[Current Period Manufacturing Costs (direct materials used, direct labor, manufacturing overhead)]
-minus
[Ending work in progress inventory]
How do you calculate the "cost of goods sold for a merchandiser?"
[Begining Inventory]
+
[Purchases and Freight-in]
-minus
[Ending Inventory]
How do you calculate the "cost of goods sold for a manufacturer?"
[Begining Finished Goods Inventory]
+
[Cost of Goods Manufactured]
-minus
[Ending Finished Goods Inventory]
What costs are inventoriable for a merchandizer?
Purchases and Freight in
What costs are inventoriable for a manufacturer?
Direct materials used, direct labor, manufacturing overhead
What is process costing?
System of assigning costs to a large number of identical units
What is job costing?
System of assigning costs to a small batch of products or services that pass through production steps as a distinct and indentifiable job and can very considerably in materials labor and overhead costs.
Compare and Contrast Job vs. Process costing
Job- less averaging - cost over a small number of units in small batch

Process - costs averaged over many identical units
cost tracing
assigning direct costs to cost objects
cost allocation
assigning indirect costs to cost objects
cost assignment
general term refering to cost allocation and tracing
Materials Inventory
T account from which you can credit direct and indirect material costs to be credited to "Work in progress" and "manufacturing overhead" accordingly
Manufacturing Wages
Credited creates a balance... debited, can be to either direct (Work in Progress) or indirect (Manufacturing Overhead)
Debit to Materials Inventory
Credit to Accounts Payable or Cash... etc...
Debit to Manufacturing Wages
Credit to Cash or to wages payable... incurring a cost
Assigning Manuafacturing Wages
Debit "Work in Progress Inventory" or "Manufacturing Overhead"... Then Credit Manufacturing Wages
What are some examples of Manufacturing Overhead?
most indirect materials and labor... plant related expenses...
How is manufacturing overhead allocated at teh begining of the year?
It is usually a set percentage of whatever the base of production is.
What happens if the actual rate of allocation is higher than the estimate?
Then the cost of the product needs to be raised due to under allocation. This is done by debiting "Cost of Goods Sold"
What happens if the actual rate of allocation is less than initially estimated?
Then there is a need to credit "Cost of Goods Sold" and debit "Manufacturing Overhead"
What if a job is "undercosted"
Then Cost of Goods sold should be debited (increased) and Manufacturing overhead needs to be credited
What if a job is "overcosted"
Debit "manufacturing overhead" and credit "cost of goods sold"
Under the conditions of overallocation, what journal entries should be made?
Debit- Manufacturing Overhead
Credit- Cost of Goods Sold
Under the conditions of underallocation, what journal entries should be made?
Debit- Cost of Goods Sold
Credit- Manufacturing Overhead
Relevant Range
The band of volume where total fixed costs remain constant and the variable costs per unit remain constant
Contribution Margin
Sales Revenue minus variable expenses. OR the amount of per unit without taking into account fixed cost.
Contribution Margin Ratio
Ratio of Contribution margin to sales revenue
Calculate Break-Even
Sales in Dollars is =
(Fixed Expense + Operating Income)
------------------------
(Contribution Margin Ratio)
what is variable costing?
Direct Materials
+ Direct Labor
+ Variable overhead
-----------------------
= Product Cost
What is absorbtion costing?
Direct Materials
+ Direct Labor
+ Variable overhead
+ Fixed overhead
-----------------------
= Product Cost