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22 Cards in this Set
- Front
- Back
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results in the creation of the financial statements.
used by both internal and external decision-makers |
Financial Accounting
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results in various internal reports
used only by internal decision-makers. |
Managerial Accounting
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aka product costs
costs of converting raw materials in to finished goods |
Manufacturing Costs
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1. Direct Labor
2. Direct Materials 3. Manufacturing Overhead |
Types of Manufacturing costs
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basic raw materials that make up the finished product
(variable costs) |
direct materials
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work of employees that can be physically/directly associated with converting raw materials into the finished goods.
(variable costs) |
direct labor
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aka indirect costs
(variable and fixed costs) includes: 1. indirect materials 2. indirect labor 3. other |
Manufacturing overhead
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raw materials too small to be considered a significant part of finished product (ex. glue); raw materials used in the manufacturing process but not part of the finished product (ex. polishing oils)
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Indirect materials
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support work personnel (ex. factory supervisor or custodian)
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indirect labor
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factory utilities, depreciation, insurance, taxes, maintenance
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other
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are the manufacturing costs (direct materials, direct labor, manufacturing overhead)
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product costs
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are all the other costs of a manufacturing corporation: advertising costs, corporate management salaries, office worker wages, administrative buildings' costs, selling costs, delivery costs
can associate them with the production of the product, so we associate them with the periods of time. |
Period Costs
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1. raw materials
2. work-in-process 3. Finished goods |
3 inventory accounts for a manufacturer
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the basic direct and indirect materials used in manufacturing
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raw materials
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the goods that have had some materials and labor added to them but aren't yet complete
debit work-in-process accounts |
work-in-process(progress)
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the goods that have been fully completed and are ready for sale;
equivalent to the Merchandise Inventory account of the merchandiser If selling goods: credit Merchandise Inventory, debit cost of goods sold |
Finished Goods
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aka expenses
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costs
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period v. product
CGS v. operating v. other direct v. indirect by behavior |
costs' classified
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change in total and proportionately with changes in the activity index
ex. direct labor, direct materials |
variable costs
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remain constant in total regardless of the changes in the activity index
ex. rent, depreciation, taxes, insurance |
fixed costs
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have both variable and fixed cost attributes
ex. utilities/electricity |
mixed costs
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remain constant per unit regardless of changes in the activity index, while fixed costs vary inversely per unit with changes in the activity index.
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variable costs vs. fixed costs
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