Ch 14 Managerial Accounting

Question 1

Cost of goods sold (COGS)

Answer 1

Beginning Inventory + COGM - End. FG inventory = COGS

Question 2

Cost of Goods Manufactured (COGM)

Answer 2

Begin. WIP + Total Manufacturing Cost = Total WIP

Total WIP - End. WIP = COGM

Question 3

What is managerial accounting?

Answer 3

• The main people using are internal users like officers and managers
• They use internal reports and make/use them as frequently as needed.
• The reports are for specific decisions.
• Accounts for submits of the business and is detail oriented.
• no independent audits

Question 4

In managerial Accounting what does it mean to “plan?”

Answer 4

• Maximize short-term profit and market share
• Commit to environmental protection and social programs.
• Add value to the business.

Question 5

What is directing in managerial accounting?

Answer 5

Directing
• Coordinate diverse activities and human resources
• Implement planned objectives
• Provide incentives to motivate employees
• Hire and train employees
• Produce a smooth-running operation

Question 6

What is “controlling,” in managerialaccounting?

Answer 6

Controlling
• Keeping activities on track
• Determine whether goals are met
• Decide changes needed to get back on track
• May use an informal or formal system of evaluations

Question 7

What are product costs?

Answer 7

• DM
• DL
• MOH
• Recorded in inventory account
• not put as an expense (COGS) until goods are sold.

Question 8

What are period costs?

Answer 8

• Selling + admin. Expense
• Charged to expense as incurred
• non-manufacturing costs
  Ex: advertising, depreciation, commissions