1: INTRO TO MANAGERIAL ACCOUNTING Flashcards
It is the practical science of value
creation within organizations in both the
private and public sectors
Managerial Accounting
It combines accounting, finance and
management with the leading-edge
techniques needed to drive successful
businesses.
Managerial Accounting
Financial Accounting produces outputs for ____ users.
External
Managerial Accounting produces outputs for ____ users.
Internal
It’s the position that has direct responsibility for the objectives of the organization
Line position
Position that is supportive in nature and
have only indirect responsibility for an
organization’s basic objectives
Staff position
Highest position in terms of the accounting department.
Controller
Highest position in terms of the finance department.
Treasurer
Highest position in both accounting and financing
CFO
They operate in financial and non-financial roles
throughout organizations and carry out all their
training and experience requirements within business
itself, providing them with a unique insight into how
their organizations operate
Management Accountants
These are the IMA standards of ethical conduct for management accountants
C - Competence
C - Confidentiality
I - Integrity
C - Credibility
Monetary measure of a resource given up to achieve a particular objective.
Cost
What are the Product Costs?
DM + DL + MOH
What are the Period Costs?
Selling or distribution costs
+
Administrative expenses
What are the costs as to traceability to cost object?
Direct and Indirect Costs
How do you solve for Direct Materials used?
Raw materials, beg
Add: Net purchases of raw materials
—————————–
Raw Materials Available for Use
Less: Raw Materials, end
—————————
Raw Materials Used
Less: Indirect Materials Used
—————————-
Direct Materials Used
How to find total manufacturing costs?
DM used + DL + MOH applied
How do you solve for COGSm?
Manufacturing Costs
WIP, beg
——————-
COGs placed in process
Less: WIP, end
——————
COGS manufactured
How do you solve for COGS available for sale?
COGS manufactured
Add: Finished Goods, beg
———————-
COGS available for sale
How do you solve for COGS - adjusted?
COGS available for sale
Less: Finished Goods, end
————————–
COGS - unadjusted
Under(over)applied MOH
————————–
COGS - adjusted
IN TOTAL:
Does not vary with regards to
changes in activity level
within the relevant range
Fixed Cost
PER UNIT:
Varies inversely with changes in activity level
Fixed Cost
IN TOTAL
Varies directly with regards to changes in activity level
Variable Cost
PER UNIT
Does not vary with changes in activity level
Variable Cost
Also known as semi-variable cost. Has both fixed and variable elements.
Mixed Cost
May be step-fixed or step-variable cost
Reacts to changes in activity levels within shorter intervals.
Step Cost
It is used to describe whether a cost changes when the level of output changes.
Cost Behavior
What kind of data are typically used in financial accounting?
Financial or non-financial?
Financial only?
Financial = with peso sign
What kind of data are typically used in managerial accounting?
Financial or non-financial?
Both financial and non-financial
What is the main indicator that distinguishes financial from non-financial?
Peso sign from financial
The data included in reports are typically for how long in financial accounting?
a. Less than one day
b. One year
c. More than one year
b. One year
The data included in reports are typically for how long in managerial accounting?
a. Less than one day
b. One year
c. More than one year
a. Less than one day
b. One year
c. More than one year
All answers
Sustainability reports are under financial accounting or managerial accounting?
Financial Accounting
(Because this is for external users)
If I need information about a particular product or department, I can find this in reports generated in
a. Managerial Accounting
b. Financial Accounting
c. Both financial accounting and managerial accounting
Managerial accounting
When do product costs become part of P/L?
When it is sold
What is typically under direct costs if silent?
Direct Materials and Direct Labor
What is typically under indirect costs if silent?
MOH
How to solve for net income in contribution form?
Sales
Less: Variable Costs
————————
Contribution Margin
Less: Fixed Costs
————————
Net Operating Income
TRUE OR FALSE:
In the long run, cost becomes fixed.
False.
(It becomes variable.)
If the cost of rent is 10,000 per month for the year. Then next year it becomes 12,000 for the year, what kind of cost is this?
Still fixed cost.
What are the different types of cost as to cost behavior?
- Fixed Cost
- Variable Cost
- Mixed Cost
- Step Cost (Fixed + Variable)
How do you find total costs?
Total Fixed Costs + Total Variable Costs = Total Costs
How do you solve for linear cost?
Y = a + bx
Y = Total Cost (Mixed Cost)
a = Total Fixed Cost
b = Variable Cost per Unit
x = Activity level/cost driver
This method of cost estimation uses historical data to classify costs as fixed or variable
Account Analysis
How do you solve in High Low Method for Cost Estimation?
(Cost of highest activity -
Cost of lowest activity) / Highest Activity - Lowest Activity
In the High Low Method for Cost Estimation, how do you solve for the total fixed cost?
TFC = TC (at highest) - (VC per Unit * No. of units)
