Chapter 1 Flashcards

1
Q

Managerial Accounting

vs

Financial Accounting

A
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2
Q

Management Functions

A
  1. Planning
  2. Directing
  3. Controlling
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3
Q

Manufacturing Costs

A

“Herstellungskosten”

  • Direct Materials
  • Direct Labor
  • Manufacturing Overhead
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4
Q

Raw Materials

A
  • Basic materials and parts used in the manufacturing process
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5
Q

Direct Materials

A

“Materialeinzelkosten”

  • Raw Materials that can be physically and directly associated with the finished product during the manufacturing process
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6
Q

Indirect Materials

A
  • Considered part of manufacturing overhead
  • NOT physically a part of the finished product or
  • or impractical to trace to the finished product
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7
Q

Direct Labor

A

“Fertigungseinzelkosten”

  • Work of a factory employee that can be physically and directly associated with cnverting raw materials into finished goods
  • Direct Labor cost vom Time Ticket ablesen!!!
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8
Q

Indirect Labor

A
  • NO physical association with the finished product
  • or impractical to trace
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9
Q

Manufactoring Overhead

A

“Gemeinkosten”

  • Costs that are indirectly associated with manufactoring the finished product
  • Includes all MANUFACTORING COSTS expect direct materials and direct labor
  • Im “Manufacturing Overhead Account” werden alle Kosten zusammengefasst (Inventory Account)
  • NO admincost !!!!!!

Also called:

factory overhead, indirect manufacturing cost or burden

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10
Q

Product Costs

A
  • Components: (-> “Produktionskosten”)
    • Direct Materials
      • Direct Labor
      • Manufactoring Overhead
  • Costs that are an integral part of production
  • Recorded in the “inventory” account
  • Not an expense (COGS) until the good is sold
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11
Q

Period Costs

A
  • Non-Manufactoring costs
  • Includes all selling and administrative expenses
    • “Vertriebs- und Verwaltungskosten”
  • Charged to expenses as incurred
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12
Q

Income Statement and COGS

Merchandiser vs. Manfacturer

A

Manufacturing Costs are reported in the income statement as an expense, once the manufactured item has been sold

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13
Q

Cost of Goods Manufactured

A

Beginning Work in Process Inventroy

+ Total Manufacturing Costs

(= Total Cost of Work in Process)

  • Ending Work in Process Inventory

_________________________________

= Cost of Goods Manufactured

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14
Q

Total Manufacturing Costs

A

= Direct Materials + Direct Labor + Manfacturing Overhead

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15
Q

Direct Materials bzw. Direct Materials Used

A

= Raw Materials Inventory t=0

+ Raw Materials Purchased

  • Raw Materials Inventory t=1
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16
Q

The Inventory account of a manufacturer

vs.

The Inventory account of a merchandising company

A

Manufacturer:

  • Raw Materials
  • Work in Process
  • Finished Goods

Merchandising Company:

  • Shows ONLY One Category of Inventory
17
Q

Just-In-Time Inventory Method

A
  • Inventory System in which goods are manufactured or purchased just in time for sale
18
Q

Total Quality Management

A
  • Reduce defects in finished products, with the goal of zero defects
19
Q

Theory of Constraints

A
  • Constraints (“Bottlenecks”) limit the complanys potential profitability
    *
20
Q

Manufacturing Overhead Cost ?

Factory Utilties

Office Equipment Utilities

A
  • Factory Utilities: MANUFACTORING OVERHEAD
  • Office Equipment Utilities: EXPENSE
    • Costs are NOT indirectly associated with manufactoring the finished product