Week 2 Flashcards
(39 cards)
What are the main functions performed by managers?
- Plan
- Direct & Motivate
- Control
- Decision Making
What are the major differences between financial and managerial accounting?
Differences include their purpose, audience, and the regulations they follow.
Define enterprise risk management.
A process used by organizations to identify, assess, and manage risks that could affect their objectives.
What is the importance of ethics for accountants?
Ethics ensures integrity, objectivity, and confidentiality in financial reporting.
What is corporate social responsibility (CSR)?
A concept where organizations consider the needs of all stakeholders when making decisions.
List the elements of corporate social responsibility.
- Customers
- Employees
- Suppliers
- Communities
- Shareholders
- Environmental & Human Rights Advocates
What influences employee behaviour according to the text?
- Intrinsic motivation
- Extrinsic incentives
- Cognitive biases
What is intrinsic motivation?
Motivation that comes from within an individual.
What are extrinsic incentives?
Rewards offered to motivate employees to achieve important goals.
Define cognitive biases.
Distorted thought processes that affect decision-making.
What are the three basic manufacturing cost categories?
- Direct materials
- Direct labour
- Manufacturing overhead
Differentiate between product costs and period costs.
- Product costs: Direct materials, direct labour, manufacturing overhead
- Period costs: Selling costs, administrative costs
What is the formula for calculating Cost of Goods Sold (COGS)?
Beginning inventory + Purchases - Ending Inventory = COGS
What does the income statement structure typically include?
- Sales
- Less: COGS
- Gross Margin
- Less: Other expenses
- Equals Net Income
What is a schedule of cost of goods manufactured?
A detailed statement showing the total cost of manufacturing during a specific period.
Describe variable costs.
Costs that change with the level of production or activity.
Describe fixed costs.
Costs that remain constant regardless of the level of activity.
What is the activity base (cost driver)?
A measure of what causes the incurrence of a variable cost.
What are committed fixed costs?
Long-term fixed costs that cannot be significantly reduced in the short term.
What are discretionary fixed costs?
Fixed costs that may be altered in the short term by managerial decisions.
What is a mixed cost?
A cost that has both fixed and variable components.
What methods are used for estimating fixed and variable components of a mixed cost?
- Account analysis
- Engineering approach
- High-low method
- Regression analysis
How do you calculate the variable cost using the high-low method?
Variable Cost = Change in cost / Change in activity
Using the high-low method, how do you find the total fixed cost?
Total Fixed Cost = Total Cost - Total Variable Cost
