Managerial Accounting Exam 1 Flashcards
(34 cards)
A similarity between financial and managerial accounting
inclusion of monetary information
Job cost sheet inclusions
direct materials, direct labor, and applied overhead
purpose of managerial accounting
provides financial and non financial accounting information to an organization’s managers. provides information in determining the costs of an organizations products and services, planning future activities, and comparing actual results to planned results
planning
process of setting goals and making plans to achieve them
controlling
process of monitoring and evaluating an organizations activities and employees
fraud triangle
opportunity, pressure, and rationalization
internal control systems
uphold company policies, promote efficiency, ensure reliable accounting, protect assets
cost object
anything for which managers want to know the cost
income statement format
revenues - COGS = Gross profit - operating expenses = operating income
prime costs
all direct costs (DM,DL)
conversion costs
DL + MOH
product costs
production costs necessary to create a product and consists of DM, DL, MOH. GAAP requires companies other than treat product costs as an asset for external financial reporting. Product costs are added to inventory and are not expensed as Cost of Goods Sold on the income statement until the product is sold
period costs
non production costs that are linked to a time period. these costs are expensed int eh period in which they are incurred and reported on the income statement
job costing
used by manufacturers that produce unique, custom ordered products, or relatively small batches of different products.
process costing
used by manufacturers for products that are made in large numbers of identical units through a series of uniform productions steps or processes - averages manufacturing costs across all units so that each identical unit bears the same cost.
job cost sheet
keeps track of all costs of a specific job - DM, DL, and allocated MOH
materials ledger cards
perpetual records that are updated each time materials are purchased and each time materials are issued for use in production
predetermined overhead rate
total estimated overhead costs/total estimated amount of activity base (the cost driver)
allocation base
the basis that management uses to allocate the MOH
cost driver
factor that causes MOH to increase or decrease as production increases or decreases
overhead applied to a job
predetermined overhead rate x actual amount of activity base used
overapplied MOH
allocated too much - decrease COGS by the amount of overallocation
underapplied MOH
did not allocate enough - increase COGS by amount of underallocation
lean principles
goal is to eliminate waste while satisfying the customer and providing a positive return to the company. Includes total quality management (TQM) and just in time manufacturing (JIT)
