Chapter 1: Managerial Accounting

Question 1

Activity-Based Costing (ABC)

Answer 1

A method of allocating overhead based on each product’s use of activities in making the product.

Question 2

Balanced Scorecard

Answer 2

A performance-measurement approach that uses both financial and non financial measures, tied to the company objectives, to evaluate a company’s operations in an integrated fashion.

Question 3

Board of Directors

Answer 3

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

Question 4

Chief Executive Officer (CEO)

Answer 4

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

Question 5

Chief Financial Officer (CFO)

Answer 5

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

Question 6

Controller

Answer 6

Responsible for a company’s accounting records, system of internal control, and preparation of financial statements, tax returns, and internal reports.

Question 7

Corporate Social Responsibility

Answer 7

The efforts of a company to employ sustainable business practices with regard to its employees and the environment.

Question 8

Cost of Goods Manufactured

Answer 8

Total cost of work in process less the cost of the ending work in process inventory.

Question 9

Direct Labor

Answer 9

The work of factory EE that can be physically and directly associated with converting raw materials into finished goods.

Question 10

Direct Materials

Answer 10

Raw materials that can be physically and directly associated with manufacturing the finished product.

Question 11

Enterprise Resource Planning System (ERP)

Answer 11

Software that provides a comprehensive, centralized, integrated source of info used to manage all major business processes.

Question 12

Indirect Labor

Answer 12

Work of factory EE that has no physical association with the finished product, or for which it is impractical to trace the costs to the goods produced.

Question 13

Indirect Materials

Answer 13

Raw Materials that don’t physically become part or the finished product of for which it is impractical to trace to the finished product b/c their physical association with the finished product is too small.

Question 14

Just-In Time Inventory

Answer 14

Inventory System where good are manufactured or purchased just in time for sale.

Question 15

Line Positions

Answer 15

Jobs that are directly involved in a company’s primary revenue-generating operating activities.

Question 16

Managerial Accounting

Answer 16

A field of accounting that provides economic and financial info for managers and other internal users.

Question 17

Manufacturing Overhead

Answer 17

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

Question 18

Period Costs

Answer 18

Cost that are matched with the revenue of a specific time period and charges to expense as incurred.

Question 19

Product Costs

Answer 19

Costs that are a necessary and integral part of producing the finished product.

Question 20

SOX

Answer 20

Law passed intended to reduce unethical corporate behavior.

Question 21

Staff Positions

Answer 21

Jobs that support the efforts of line employees.

Question 22

Theory of Constraints

Answer 22

A specific approach used to identify and manage constraints in order to achieve the company’s goal.

Question 23

Total Cost of Work in Process

Answer 23

Cost of the beginning work in process plus total manufacturing costs for the current period.

Question 24

Total Manufacturing Costs

Answer 24

The sum of direct materials, direct labor, and manufacturing overhead incurred in the current period.

Question 25

Total Quality Management TQM

Answer 25

Systems implemented to reduce defects in finished produce with the goal of achieving zero defects.

Question 26

Treasurer

Answer 26

Financial officer responsible for custody of a company’s funds and for maintaining its cash position.

Question 27

Triple Bottom Line

Answer 27

The evaluations of a company’s social responsibility performance with regard to the people, planet, and profit.

Question 28

Value Chain

Answer 28

All activities that a business processes with providing a product of service.