Essay about Notes 1 for Introduction of Managerial Accounting

1528 Words Nov 29th, 2014 7 Pages
The value chain is the sequence of business functions in which customer usefulness is added to products or services.
In supporting managers, management accountants have three guidelines. These guidelines are: Cost-benefit analysis, behavioral considerations and technical considerations, and different costs for different purposes.
Galway Co. management desires cost information regarding its Celtic brand. The Celtic brand is a(n) cost object. Cost objects are anything for which a measurement of cost is desired
The cost of a product can be measured as any of the following except as one b. identified as period cost
Which of the following is not a factor in cost-volume-profit analysis? c. Total variable costs
Chpt.4 PPT----Basic Costing
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(Determine the appropriate cost pools that are necessary.) 5 Compute the Rate per Unit of each cost-allocate base used to allocate indirect costs to the job (normal costing so use budgeted values) 6. Compute the indirect costs allocated to the job: Budgeted Allocation Rate x Actual Base Activity For the Job 7. Compute total job costs by adding all direct and indirect costs together.

Three Methods for Adjusting Over/Underapplied Overhead: 1. Adjusted allocation rate approach—all allocations are recalculated with the actual, exact allocation rate. 2. Proration approach—the difference is allocated between cost of goods sold, work-in-process, and finished goods based on their relative sizes. 3. Write-off approach—the difference is simply written off to cost of goods sold.
When management is deciding between approaches, they should consider the following: the purpose of the adjustment; The size of the amount that was over- or underallocated; Whether the variance was over- or underallocated; The choice of method should be based on such issues as materiality, consistency, and industry practice.
Chpt. 3 PPT: A Five-Step Decision-Making Process in Planning and Control – Revisited: DEFINE-Identify the problem and uncertainties. MEASURE-Obtain information. ANALYZE-Make predictions about the future. IMPROVE-Make

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