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Comm 305: Managerial Accounting > chapter 1 from old book > Flashcards

chapter 1 from old book Flashcards

1
Q

does managerial accounting apply to all businesses? which are they?

A

yes

service, merchandising, and manufacturing

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2
Q

does does managerial accounting apply to all business organizations? which are they?

A

yes

proprietorships, partnerships, and corporations.

Not-for-profit entities as well as profit-oriented enterprises need managerial accounting.

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3
Q

do you need managerial accounting to advance in your career like get promoted and shid?

A

ye boy

all levels at a business organization have knowledge in managerial accounting

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4
Q

wh¡at are organizational charts used for?

A

the show the delegation of power in an organization

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5
Q

what are line positions?

give examples

A

positons that are contribute directly to the company’s primary revenue-generating operating activities

vice president of operations

vice president of marketing

plant managers

supervisors

production personnel

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6
Q

what are staff positions?

give examples

A

involved in activities that support the efforts of the line employees

finance

legal

human resources

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7
Q

why was the Sarbanes-Oxley Act of 2002 (SOX) created?

A

In response to corporate scandals in 2000 and 2001, the U.S. Congress enacted legislation to help prevent lapses in internal control

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8
Q

what does SOX clarify?

A

SOX clarifies top management’s responsibility for the company’s financial statements.

In addition, top managers must certify that the company maintains an adequate system of internal control to safeguard the company’s assets and ensure accurate financial reports

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9
Q

what is included in manufacturing costs

A

direct materials

direct labor

manufacturing overhead

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10
Q

what are indirect materials and indirect labor classified as?

A

manufacturing overhead

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11
Q

manufacturing overhead

A

costs that are indirectly associated with the manufacture of the finished product

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12
Q

what does manufacturing overhead include?

A

indirect materials

indirect labor

depreciation on factory buildings and machines

insurance

taxes

maintenance on factory facilities

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13
Q

why is direct labor dropping?

A

because of automation

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14
Q

product costs (manufacturing costs)

A

direct materials

direct labor

manufacturing overhead

costs that are integral in the fabrication of a product

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15
Q

how are product costs recorded?

A

as inventory when incurred

recorded as expenses when product has been sold

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16
Q

what are period costs (non manufacturing costs)?

A

costs that are matched with the revenue of a specific time period rather than included as part of the cost of a salable product

selling and administrative expenses

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17
Q

what is the total cost of work in process?

A

the cost of manufacturing this period and

the cost of the beginning work in process

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18
Q

ending work in process inventory

A

units that are only partially completed by the end of the period

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19
Q

cost of goods manufactured schedule

A

reports cost elements used in calculating cost of goods manufactured

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20
Q

what are the possible inventory accounts for the balance sheet of a manufacturer?

A

raw materials inventory

work in process inventory

finished goods inventory

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21
Q

raw materials inventory

A

shows the cost of raw materials on hand

22
Q

work in process inventory

A

shows the cost applicable to units that have started into production but are only partially completed

23
Q

finished goods inventory

A

shows the costs of completed goods on hand

24
Q

how are the inventory accounts of a manufacturer listen in the balance sheet?

A

in order of liquidity

finished goods

work in process

raw materials

25
Q

what is the main difference between service companies and manufacturing companies?

A

service companies have their products consumed immediately

26
Q

what does the value chain refer to?

A

it refers to all activities associated with providing a product or service

27
Q

what does a manufacturer’s value chain include?

A

include research and development

product design

acquisition of raw materials

production

sales and marketing

delivery

customer relations, and subsequent service

28
Q

has computerization and automation increased the value chain’s effectiveness?

A

yeee boyyy

29
Q

enterprise resource planning (ERP) software systems

A

provide a comprehensive, centralized, integrated source of information

companies can it use to manage all major business processes, from purchasing to manufacturing to human resources

ERP systems enable a two-way flow of information between a company and its major suppliers, customers, and business partners

30
Q

why can ERP replace as many as 200 individuals in large companies?

A

an ERP system can eliminate the need for individual software packages for personnel, inventory management, receivables, and payroll

31
Q

computer-integrated manufacturing (CIM)

A

many companies can now manufacture products that are untouched by human hands

An example is the use of robotic equipment in the steel and automobile industries

32
Q

just-in-time (JIT) inventory method

A

goods are manufactured or purchased just in time for sale

33
Q

total quality management (TQM) systems

A

reduce defects in finished products to hopefully achieve the zero defect level

provide information on nonfinancial measures

these include customer satisfaction, number of service calls, and time to generate reports

34
Q

can overhead costs be directly traced to individual products?

A

nah boyyy

35
Q

how can you determine each product’s cost with overhead?

A

by allocating overhead to various products

to obtain more accurate product costs, companies now use activity-based costing (ABC)

36
Q

activity-based costing (ABC)

A

companies allocate overhead based on each product’s use of activities in making the product

For example, companies can keep track of their cost of setting up machines for each batch of a production process

Then companies can allocate part of the total set-up cost to a particular product based on the number of set-ups that product required

37
Q

theory of constraints

A

specific approach used to identify and manage constraints in order to achieve the company’s goals

38
Q

The balanced scorecard

A

performance-measurement approach

uses both financial and nonfinancial measures to evaluate all aspects of a company’s operations in an integrated fash- ion

39
Q

how are the performance measures in the balance scorecard linked?

A

The performance measures are linked in a cause-and-effect fashion to ensure that they all tie to the company’s overall objectives

40
Q

Outsourcing

A

hiring an outside supplier to provide elements of a product rather than producing them internally

41
Q

are office supplies cost manufacturing overhead or period costs?

A

period costs

42
Q

are rent and insurance manufacturing overhead or period costs?

A

manufacturing overhead

43
Q

is depreciation on office equipment manufacturing overhead or period costs?

A

period costs

44
Q

is depreciation on manufacturing building manufacturing overhead or period costs?

A

manufacturing overhead

45
Q

are period costs included in the total manufacturing costs?

A

nah boyyy

46
Q

in the accounting cycle of both the merchandising and manufacturing companies, where does it differ?

A

in the work sheets

in the closing entries

the rest remains the same

47
Q

how are manufacturing companies’ spreadsheets different?

A

it needs two additional columns for the cost of goods manufactured schedule

we insert debit and credit columns for this schedule before the income statement columns

48
Q

how are manufacturing companies’ closing entries different?

A

Manufacturing companies use a Manufacturing Summary account

it closes all accounts that appear in the cost of goods manufactured schedule

The balance of the Manufacturing Summary account is the Cost of Goods Manufactured for the period

Manufacturing Summary is then closed to Income Summary

49
Q

The group of officials elected by the stockholders of a corporation to formulate operating policies, select officers, and otherwise manage the company

A

board of directors

50
Q

Corporate officer who has overall responsibility for managing the business and delegates responsibilities to other corporate officers

A

CEO

51
Q

Corporate officer who is responsible for all of the accounting and finance issues of the company

A

CFO

Comm 305: Managerial Accounting (32 decks)

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