Exam 2 (Quiz 4) - Chapter 16 Flashcards
Define:
Managerial Accounting
provides qualitative information to managers, and the quantitative information includes financial and non-financial data
Define:
Non-financial data in managerial accounting
Important quantitative information not on financial statements such as customer satisfaction, employee satisfaction, employee performance metrics
Important in terms of predicting future performance of an organization
Answer:
Managerial accounting provides information to ___(a)___ users and not ___(b)___ uses. You cannot ___(c)___ on managerial accounting information, that would be considered ___(d)___
a. inside
b. outside
c. trade
d. insider trading
Answer:
Managerial accounting allows internal users to make important decisions about ___(a)__, particularly about ___(b)___ and ___(c)___
a. the operation
b. planning
c. controlling
Answer:
With planning, you make ___(a)___ plans and ___(b)___ plans. A typical type of planning is ___(c)___
a. long term
b. short term
c. budgeting
List:
Parts of Controlling
- Actual Performance (measure of what happened)
2. Variance Analysis (comparison of budget and actual performance)
Define:
Actual Performance
Measure of performance at the end of a period
measure of what actually happened
Define:
Variance Analysis
Comparison of budget to actual performance
So it is a comparison of how we wanted to perform versus how we actually performed
Look at the reason for the variance, if it is favorable or non-favorable, and if it is controllable or non-controllable
Answer:
In variance analysis, we look at the ___(a)___ for variance and whether this is ___(b)___ or ___(c)____. Is it ___(d)___ or ___(e)___
a. reason
b. favorable
c. unfavorable
d. controllable
e. non-controllable
Answer:
Financial accounting is about ___(a)___, while managerial accounting is about ___(b)___ and ___(c)___
a. the past, what already occurred
b. retrospection (the past)
c. prospection (the future)
Answer:
Budget is about ___(a)___
a. the future
Answer:
The target audience for financial accounting is ___(a)___, while the target audience for managerial accounting is ___(b)___
a. outsiders
b. insiders
Answer:
There is a lot of ___(a)___ information and ___(b)___ information on managerial accounting statements
a. proprietary
b. private
Answer:
In managerial accounting, there are no rules about ___(a)___ or ___(b)___
a. the specific form
b. presentation format
Answer:
One of the most important pieces of data extracted by both financial and managerial accounting is ___(a)___
a. cost
Answer:
Cost is a/an ___(a)___ term. It is a measure of ___(b)___
a. economic
b. all of the economic resources given up to achieve a particular purpose
Answer:
In financial accounting you have to specify if the cost is a/an ___(a)___ or ___(b)___
a. asset
b. expense
Answer:
In financial accounting, if a cost is an asset, it is ___(a)___, but for the ___(b)___
a. money or economic resources given up to achieve something
b. future benefit
Answer:
In financial accounting, cost expenses are incurred when ___(a)___ for the purpose of ___(b)___, so expenses are going to help you focus on ___(c)___
a. assets are used up or sold
b. generating revenue for the period
c. this period of benefits
Answer:
For managerial accounting, you have to specify if cost is ___(a)___ or ___(b)___
a. product cost
b. period cost
Answer:
In managerial accounting, product cost has to be related to ___(a)___ and you are specifically focusing on the ___(b)___
a. the inventory
b. physical inventory
Answer:
In managerial accounting, for manufacturing firms, product cost is talking about either ___(a)___, or ___(b)___
a. cost of obtaining inventory
b. cost of producing inventory
Answer:
In managerial accounting, period cost is related to ___(a)___, so all of the other ___(b)___ cost which are not ____(c)___
a. time
b. non-production
c. inventorized
List:
Examples of Period Cost in Managerial Accounting
- CEO compensation
2. CFO Compensation
List:
Examples of Product Cost
- direct materials used for production
- direct labor used for production
- Utility bills in the unit of production
Answer:
In managerial accounting, all of the costs that occurred ___(a)___ are the ___(b)___ cost, and all of the cost that occurred ___(c)___ are the ___(d)___
a. during or in the production unit
b. production
c. outside of the production unit
d. period
Answer:
For service companies, their costs are ___(a)___ because they don’t have ____(b)____ or ___(c)____
a. period costs
b. goods for sale
c. physical inventories
Example:
Unit cost for service company
Costs: $3,900
Services Rendered: 1950
Cost / Services Rendered
$3,900 / 1950 = $2 per service rendered
Answer:
The ___(a)___ of a service company will be available of financial statements, but ___(b)___ will not be on financial statements, and is only available in ___(c)___
a. period costs
b. unit costs
c. managerial accounting reports
Answer:
The unit cost information on managerial accounting reports is important to ___(a)___ because it allows them to determine ___(b)___ and ___(c)___
a. insiders
b. pricing
c. cost controls
Answer:
Managerial accounting looks at cost increases and determines if the increase is due to some the company ___(a)___ such as ___(b)___, or something the company ___(c)___ such as ___(d)___
a. cannot control
b. inflation in the labor market or raw materials
c. can control
d. decreased efficiency
Answer:
Merchandising companies don’t ___(a)___, they just ___(b)___, so they do have ___(c)___
a. produce products
b. sell physical products
c. physical inventory
Answer:
In terms of cost, merchandising companies do have ___(a)___ directly related to ___(b)___, and they also have ___(c)___ directly related with ___(d)___
a. product costs
b. physical products
c. period costs
d. time
Answer:
Merchandising companies only have one ___(a)___ account, which is why product cost is the ___(b)___ of those ___(c)___
a. inventory
b. acquisition cost
c. products
Answer:
For merchandising companies, the total acquisition cost is the ___(a)___ and ___(b)___
a. purchase price from vendors
b. freight/transport costs
Answer:
What does a manufacturing company generally do?
They purchase, they produce and they sell
List:
Items Manufacturing Companies Purchase
- Raw materials
- Supporting materials
- Labor
Answer:
Once manufacturing companies purchase raw materials, the ___(a)___ if the raw materials they purchase will be recorded in ___(b)___, and what they purchase is a/an ___(c)___.
a. acquisition cost
b. raw materials
c. asset
Answer:
Once a manufacturing company uses raw materials in the process, the value of the unfinished goods are recorded in the ___(a)___
a. work in progress account
Answer:
The work in progress account includes the ___(a)___, which include the ___(b)___ and the ___(c)___
a. value of the unfinished goods
b. cost of raw materials
c. labor
Answer:
Once manufacturing companies have finished making the product, the cost of finished goods are transferred from the ___(a)___ to the ___(b)___
a. work in progress account
b. finished goods inventory
List (in order):
Cost flow of a typical manufacturing company
- Purchase of raw materials - values/acquisition cost –> recorded in raw materials
- Use raw materials and labor to produce –> recorded in in progress account
- Have final product for sale –> recorded in finished goods inventory
Answer:
Service companies have ___(a)___ costs
Merchandising companies have ___(b)___ costs
Manufacturing companies have ___(c)___ costs
a. period
b. product and period
c. product and period
Answer:
Merchandising companies don’t have ___(a)___ so their product cost is based on ___(b)___
a. production costs
b. cost of obtaining goods to sell
List:
Production Cost Types for Manufacturing Firms
- Direct Materials
- Direct Labor
- Manufacturing Overhead
Define:
Direct Materials
Physical part of the finished product produced
Define:
Direct Labor
Wages paid to those employees who actually work on the production line and convert materials into a company’s products
Define:
Manufacturing Overhead
Costs that occurred during production that are not raw materials or raw labor so they are indirect materials and indirect labor
Answer:
Once production is complete, the ___(a)___ will flow into the ___(b)___. Once the goods are sold, they will flow to the ___(c)___ account.
a. cost of those finished goods
b. finished goods inventory
c. goods sold
Answer:
Finished goods number appears on the ___(a)___
a. income statement
