Chapter 1 Flashcards
Financial accounting
External reporting that verifies companies uses of money
Managerial accounting
Internal reporting that helps plan future goods of the company
What does managerial acc do?
Plans, controls, makes decisions
Ethics in managerial accounting guidelines
-Competency
- Confidentiality
- integrity
- Credibility
Direct costs
Cost can easily be traced to a specific object.
- manufacturing overhead
Indirect cost
Can’t be traced to a specific object
Manufacturing overhead
Cost associated with manufacturing that can’t be traced
Product costs
Direct materials + direct labor + manufacturing
Period costs (general admin costs)
Selling exp + administrative exp
Prime cost
Direct materials + direct labor
Conversion cost
Direct labor + manufacturing overhead
Variable costs
Constant per unit but changes the total depending on if you add or make less units
Fixed costs
$Per unit varies but total stays the same
Can change though in the next period
Mixed cost behavior → product costs
Moves from inventory on bs → cogs on is
Differential costs
Cost difference between any 2 alternatives
Differential revenue
Difference in reserves
Sunk cost
Already been incurred and cannot be changed
Traditional format is
Sales
Cogs
Gross margin
Selling and admin exp
Net operating income
Contribution format is
Sales
Variable exp
Contribution margin
Fixed exp
Net operating income
Cogs formula
Beg. Inv + purchases - ending inv
