chapter 1- managerial accounting intro Flashcards
manufacturing
convert raw materials into finished goods1
product manufacturing costs
- direct materials
- direct labor
- manufacturing overhead
* not an expense until goods are sold (COGS)
manufacturing overhead
“consists of costs that are indirectly associated with the manufacture of the finished product.”
- indirect materials
- indirect labor
- depreciation on factory buildings, machines.
- insurance, taxes and maintenance on factory facilities
Period costs
a) are matched with the revenue of a specific time period
b) relate to non-manufacturing costs
c) include selling and administrative expenses.
total manufactoring costs
the sum of the product costs (DM+DL+MO) for the current period
merchandiser COGS
beginning merchandise inventory+ the cost of goods purchased - the ending merchandise inventory.
manufacturer COGS
beginning finished good inventory + cost of goods manufactured-ending finished goods inventory
total cost of WIP (work in process)
cost of the beginning work in process inventory + total manufacturing costs for the current period
cost of goods manufactured
total cost of WIP - Ending work in process inventory
balance sheet inventory accounts for manufacturer
- raw materials
- finished goods
- work in process
balance sheet for merchandising
chows just one category of inventory
financial accounting
- its for external users
- financial statements quarterly and annually
- general purpose
- pertains to business as a whole
- GAAP
managerial accounting
- users: officers and managers
- internal reports, as frequently as needed
- pertains to subunits of the business.
