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Flashcards in Exam 1 Deck (16):
1

5 goals of Managerial Accounting?

-Report to internal managers
-emphasize timeliness
-emphasize relevance
-emphasize decisions affecting the future
-emphasize segment reports

2

4 basic functions of Managerial Accounting?

-Planning
-Controlling
-Decision making
-Help managers carry out basic functions

3

3 types of Product costs for Manufacturers?

-Direct Labor
-Direct Materials
-Manufacturing Overhead

4

Manufacturing Overhead?

-is a product costs

-is all the INDIRECT costs that go into the final product
-indirect labor
-indirect material

5

How are Product costs expensed?

You Debit COGS when inventory is sold

6

How are Period costs expensed?

You expense them in the period INCURRED

7

3 classifications of Costs?

Variable Costs
Fixed Costs
Mixed Costs

8

Explain Cost Behavior

Is how a cost of something behaves in it's "Relevant Range"

Ex: If I buy 5 cars from Mexico, my import costs go up 5%

9

3 ways to Analyze Cost Behavior?

Scattergraph Method
-plot points
-find linear line

Account Analysis
-look at each account Individually
-classify as Fixed Cost or Variable Cost

High-Low method
y=mx+b

10

What is the Contribution Margin?

Sales - Variable Costs

11

Contribution Margin Income Statement format

Sales
-(Variable Costs)
CONTRIBUTION MARGIN
-(Fixed Costs)
NET OPERATING INCOME

12

Income Statement Format?

Sales
-(Product Costs)
GROSS MARGIN
-(Period Costs)
NET OPERATING INCOME

13

What do you divide Total Manufacturing Costs by to get "average cost per EU"

End WIP units + Units Completed

14

What ratios do you look at to see if a company is paying it's bills on time?

Liquity Ratio
-Current Ratio
-Acid quick-test

Debt Management
-Times interest earned

15

3 most important ratios to assess liquity?

Current Ratio
Acid quick-test ratio
Account Receivable Turnover (because of CA)

16

2 most important ratios to assess Profitability?

Gross Margin
Net Margin Percentage