Chapter 18 - Managerial Flashcards
Where do product costs appear?
On both the income statement and the balance sheet
How do you determine gross margin?
Sales - Cost per unit
Beginning Materials + Purchases - Ending Inventory Equals
Materials Used
Managers use managerial information to
evaluate the performance of a company’s operations, support long-term planning decisions, and determine the cost of manufacturing a product
What statement is cost of merchandise sold on
The income statement
In the income stastement of a manufacturing company, what replaces purchases in the cost of goods section of a retail company?
Cost of goods manufactured
Direct labor wages, Machine operator wages, and assembly line wages are all
Prime costs
Direct materials, Direct labor and factory overhead are all
Product costs
What are two examples of conversion costs?
Direct labor cost and facotry overhead costs
Another term for factory overhead is
Factory burden
The cost of materials entering directly into the manufacturing process is clasified as
Direct materials cost
What is the primary criterion for the preparation of managerial accounting reports?
Meet the manager’s needs
What form of accounting may rely on estimates and forecasts
Most associated with managerial accounting
In most business organizations, the chief management accountant is called the
Controller
The controller’s staff often consists of several management accountants. All of the following would most likely be on the controller’s staff
General accountants, budgets and budget analysts, and cost accountants
What type of accounting is prepared according to management’s needs?
Managerial accounting
In order to be useful to managers, management accounting reports should possess all of the following characteristics
provide objective measures of past operations and subjective estimates about future decisions, be provided at any time managment nees information and be prepared to report information for any unit of the business to support decision making
What are the basic functions of management?
Planning and controlling
The process of developing the organization’;s objectives and goals is
Planning
What is the principle reason for preparing managerial accounting reports?
Usefulness to management
What is not a characteristsic of useful managerial accounting reports?
GAAP
What is false in regards to direct materials for an auto manufacturer
Small plastic clips to hold on door panels, because they become part of the auto, must be accounted for as direct materials
The costs of a manufactured product generally consists of which of the following costs?
Direct labor, direct materials and factory overhead
How do we compute conversion costs?
Direct Labor + Factory Overhead
What is strategic planning
Developing long-term actions to achieve the company’s objectives
What is operational planning?
Developing short term actions for managing the day-to-day operaqtions of the company
Materials inventory is sometimes called what?
Raw Materials Inventory
What is the difference between period costs and product costs?
Product costs consist of manufactoring costs and period costs consist of selling and administrative expenses
What are the phases of the management process?
Planning, directing, controlling, improving, and decision making.
Financial accounting statements are used by….
shareholders, creditors, government agencies and general public.
Who is above a senior vice president?
CEO and or President
What are the two types of labor?
Direct labor is the cost of the wages of the employees that is an integral part of the finished product Indirect labor affects not only the specific product (janitorial labor)
What is the purpose of a staff department?
A staff department provides services, assistance, and advice to the departments with line or other staff responsibilities
.
Managerial accounting can be defined as?
information desighned to meet the specific needs of a company’s management
Name an objective measure?
Historical data
Name a subjective estimate?
Estimated data
What is the Chief Financial officer in charge of?
Responsible for specialized accounting functions
An integral part of the finished product is called?
Direct Materials
What is finished goods inventory?
constists of completed products
Line Department
People involved in providing goods or services to the customers of the company
