Final Exam (Comprehensive) Flashcards
What are the three responsibilities of managers? (CHP 1) (Exam 1)
Planning - Setting goals and objectives for the company and determining how to achieve them.
Directing - Overseeing the company’s day-to-day operations. They use sales and cost information to run daily business operations.
Controlling - Evaluating the results of business operations against the plan and making adjustments to keep the company pressing toward it’s goal.
What are the differences between managerial and Financial Accounting? (CHP 1) (Exam 1)
Managerial Accounting
- For Internal users like managers.
- Can be prepared whenever it’s needed.
- Doesn’t need to follow a strict format like GAAP since it’s not for external users
Financial Accounting
- For external users like lenders and stockholders
- Is prepared annually and quarterly
- Must follow GAAP
What are the four ethical standards of the IMA? (CHP 1) (Exam 1)
IMA (Institute of Management Accountants)
1 - Maintain their professional COMPETENCE
- Maintain an appropriate level of professional leadership and expertise by enhancing knowledge and skills
- Perform professional duties in accordance with relevant laws, regulations, and technical standards
- Provide decision-support informational recommendations that are accurate, clear, concise, and timely
2 - Preserve the CONFIDENTIALITY of the information they handle
- Keep information confidential except when disclosure is authorized or legally required.
- Inform all relevant parties regarding the appropriate use of confidential information.
- Refrain from using confidential information for unethical or illegal advantages
3 - Uphold their INTEGRITY
- Mitigate actual conflicts of interest.
- Refrain from engaging in any conduct that would prejudice carrying out duties ethically
- Abstain from engaging in or supporting any activity that might discredit the profession
4 - Perform their duties with CREDIBILITY
- Communicate information fairly and objectively.
- Provide all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, analyses, or recommendations
- Report delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.
- Communicate professional limitations or other constraints that would preclude responsibility judgment or successful performance of an activity.
What are data analytics? (CHP 1) (Exam 1)
Data analytics is the process of turning raw data into actionable insights that lead to good business decisions
What are the different types of data? (CHP 1) (Exam 1)
Structured Data
- Data that are highly organized into predefined categories and are fairly easy to search and manipulate.
- EX - Sales records contain data organized into predefined categories such as date of sale, invoice number, customer name, customer number, product sold, quantity sold, etc.
Unstructured Data
- Data that are not organized into predefined categories.
- EX - Social media posts, digital photos, videos, etc. This data is messy compared to structured data.
Semi-Structured Data
- Data that do not have predefined categories but have tags or makers to add some structure.
- EX - A “Like” on an Instagram or Facebook post adds an element of structure to what would otherwise be considered unstructured.
Numerical Data
- Discrete data - Can be counted
- Continuous data - Measurements
Categorical Data
- Has no numerical value or natural order.
- Can also be called nominal Data
- EX - country, distribution channel, product type.
Ordinal Data
- Data that has a clearly defined order and may mix numerical and categorical data.
- EX - Customer satisfaction rating. 1-5 in user experience, where 2 is better than 1.
In Excel, to select a whole data set, place the cursor on ________ and hold down the Ctrl + A keys simultaneously
Any cell within the data set
What does the “Triple Bottom Line” Refer to?
The concept that a company’s performance should be viewed not only in terms of its ability to generate economic profits for its owners, as has traditionally been the case, but also in terms of its impact on people and the planet
In Excel, when you want to select a whole column of data, place the cursor on the top cell of the column and hold down which keys simultaneously?
Ctrl + Shift + arrow down key
What are the benefits of data analytics? (CHP 1) (Exam 1)
1 - Data-Driven decisions
- Gathering data like the time it takes kids to do their homework you can come up with an average timeframe to give. You use information to base your decisions on.
2 - Helps make quicker decisions
- Using information from the past can help businesses have a starting point instead of going from the beginning which saves time.
3 - Can increase the efficiency of internal operations
- Some companies use sensors to detect people in a room to save money on the light bill the lights turn off whenever there’s no one nearby.
4 - Can help companies better adapt and respond to customer’s individual preferences by more specifically tailoring marketing efforts.
- A company gives you coupons after your purchase, behind those coupons there’s a system that analyses what you buy to give you coupons for what you buy often to keep you coming back.
5 - Can drive company innovation and have a disruptive effect on existing industries.
- Things like Uber, Drones, and Amazon have had a big impact on existing industries.
What is the purpose of data analytics? (CHP 1) (Exam 1)
At its core, data analytics is all about using data to make good business decisions.
What are the three types of businesses? (CHP 2) (Exam 1)
1 - Service Company
- A Company that sells intangible services rather than tangible products.
- EX - Accounting Firm
2 - Merchandising Company
- A company that resells tangible products previously bought from suppliers
- EX - Walmart, Retailers, Whole salers
3 - Manufacturing Company
- A company that uses labor, plant, and equipment to convert raw materials into new finished products.
- EX - Toyota, incurs the cost to build the car then sells to a Merchandiser for them to sell
What is the Value Chain? and what is its purpose? (CHP 2) (Exam 1)
The value chain are the activities that add value to a firm’s products and services; includes
- R&D (Research and Design)
- Production or Purchases
- Design
- Marketing
- Distribution
- Customer Service
(((It’s important because all the activities in the value chain are important, yet each costs money to perform. Managers must understand how decisions made in one area of the value chain will affect the costs incurred in other areas of the value chain.)))
Describe and differentiate direct and indirect costs. (CHP 2) (Exam 1)
Direct Cost - A cost that can be traced to a cost object; a cost that is readily identifiable or associated with the cost object
- EX - Tires of a car, Wages of assembly line workers
Indirect Cost - A cost that relates to the cost object but cannot be traced specifically to it; a cost that is jointly used or shared by more than one cost object
- EX - Utilities for the plant, It is needed to build a car but you cannot trace how much was used for 1 car specifically
Describe and differentiate Product Costs and Period Costs. (CHP 2) (Exam 1)
Product Costs - The costs incurred by manufacturers to produce their products or incurred by merchandisers to purchase their products. (Costs incurred by making or acquiring the product)
- EX - COGS
Period Costs - The costs incurred by the company to operate the business that do not get treated as inventory but rather are expensed immediately in the period in which they are incurred. (““Often called operating expenses””)
Describe and differentiate Prime Costs and Conversion Costs.
(CHP 2) (Exam 1)
Prime Costs - The combination of material and direct labor costs.
(DL + DM = Prime Costs)
Conversion Costs - The combination of direct labor and manufacturing overhead costs.
(DL + MOH = Conversion Costs)
What is the Formula for a service company’s income statement. (CHP 2)
Revenue
(-) Operating Expenses
——————————–
Operating Income
What is the formula for a merchandiser’s income statement? (CHP 2)
Revenue
(-) COGS
————————
Gross profit
(-) Operating Expenses
————————————-
Operating Income
What is the formula used to get the income statement of a manufacturer’s company? (CHP 2)
Sales Revenue
(-) COGS
—————————
Gross Profit
(-) Operating Expenses
——————————-
Operating Income
How do you sort and filter in Excel explain the process of each. (CHP 2) (Exam 1)
What is the process of getting Direct Materials Used? Give the formula (CHP 2) (Exam 1)
Beginning Raw Materials
(+) Purchases of Direct Materials, Freight-In, and Import Duties
——————————————–
Materials Available for use
(-) Ending Raw Materials Inventory
———————————————–
Direct Materials Used
What is the process of getting the Cost of Goods Manufactured? Give the formula (CHP 2) (Exam 1)
Beginning Work-In-Process
(+) Manufacturing Costs Incurred
DL
DM
MOH
——————————————
Total manufacturing costs to account for
(-) Ending Work-In-Process Inventory
——————————————-
Cost of Goods Manufactured (CGM)
What is the process of getting the Cost of Goods Sold? Give the formula (CHP 2) (Exam 1)
Beginning Finished Goods Inv
(+) Cost of Goods Manufactured (CGM)
———————————————–
Cost of Goods available for sale
(-) Ending Finished Goods Inventory
————————————————–
Cost of Goods Sold
How do you calculate the Product Cost? (CHP 2)
Direct Labor + Direct Materials + MOH = Product Cost
Differentiate Job costing and Process costing. (CHP 3) (Exam 1)
Process Costing = Mass production
- A system for assigning costs to a large number of identical units that typically pass through a series of uniform production steps. Costs are averaged over the units produced such that each unit bears the same unit costs.
- EX - Every product goes through the same steps thus cost the same. (Marinara sauce)(Mustard)
Job Costing = Unique Production
- A system for assigning costs to products or services that differ in the amount of materials, labor, and overhead required.
- EX - Unique Houses, Unique Furniture, Unique jewelry.
What are allocations? What are they used for? (In what process are they used?) (CHP 3) (Exam 1)
Allocating manufacturing overhead to jobs simply means that we will be “Splitting up” or “Dividing” the total manufacturing overhead costs among the jobs we produced during the year.
- EX - We would put a “Piece” of the price of MOH to each product to make up for the costs.
How do you get the Predetermined MOH Allocation Rate? Give formula. (CHP 3)
Predetermined MOH rate =
Total Estimated amount of the allocation base (Cost Driver)
What are the steps to allocate Manufacturing Overhead? (CHP 3)
Step 1 - The company estimates its total manufacturing overhead costs for the coming year
Step 2 - The company selects an allocation base and estimates the total amount that will be used during the year.
Step 3 - The company calculates its predetermined manufacturing overhead (MOH) rate using the information estimated in steps 1 and 2.
Step 4 - The company allocates some manufacturing overhead to each individual job as follow:
MOH allocated to a job =
Predetermined MOH rate X Actual amount of allocation based by the job.
What does it mean to have an Overallocated or Underallocated manufacturing overhead? Also, when do these events occur? (CHP 3) (Exam 1)
Overallocated manufacturing overhead
- The amount of manufacturing overhead allocated to jobs is more than the amount of manufacturing overhead costs actually incurred; results in jobs being overcosted
- Occurs when jobs have been overcosted. The estimated is greater than the actual MOH incurred and distributed to products.
Underallocating manufacturing overhead
- The amount of manufacturing overhead allocated to jobs is less than the amount of manufacturing overhead costs actually incurred; this results in jobs being undercosted.
- Occurs when jobs have been undercosted. The estimated is less than the actual MOH incurred and distributed to products.
These Over and Under allocations are fixed when pricing the COGS. We would either increase COGS for underallocation or Decrease COGS for overallocation.
What is the RPA? What does it do? (CHP 3) (Exam 1)
Robotic process automation (RPA)
- A software system that observes a person or user performing a task, recognizes patterns in that user activity, and creates a “bot” tp replicate that person’s task processes.
What are pivot tables? what do they do and how do you make them? (CHP 3) (Exam 1)
Pivot tables are tables made in Excel these tables have the ability to sort, filter, and graph data.
To make a pivot table you would select any cell in the data set and go to the ribbon then go to “Insert” and click “Pivot Table” Then you would drags what you wants columns and rows you want as well as values.
How do you acquire the Plant-wide manufacturing Overhead Allocation rate? Give the formula (CHP 3) (Exam 1)
Plantwide overhead rate
- when overhead is allocated to every product using the same manufacturing overhead rate.
You would use the predetermined MOH rate formula
Total Estimated MOH / Cost driver
How do you calculate the cost of a job? Give the formula (CHP 3) (Exam 1)
Direct Materials + Direct Labor + MOH = Total Job Cost
What is Activity-based costing? (CHP 4) (Exam 2)
What is Activity-based management? (CHP 4) (Exam 2)
What is Lean production? (CHP 4) (Exam 2)
What are the four categories of quality costs? (CHP 4) (Exam 2)
What is the Data cleaning process? (CHP 4) (Exam 2)
In Excel what is “Correlation” what does it do how do you initiate the formula? (CHP 4) (Exam 2)
How do you calculate the Departmental overhead rate? Give the formula. (CHP 4) (Exam 2)
How do you calculate the Activity-Based cost allocation rate? Give formula. (CHP 4) (Exam 2)
How do you calculate Allocations using departmental rate or ABC Rate? Give formula. (CHP 4) (Exam 2)
Differentiate between Variable costs, Fixed costs, and Mixed costs. Give examples of each. (CHP 6) (Exam 2)
What is Relevant range? how is it useful? (CHP 6) (Exam 2)
What is the cost equation? (CHP 6) (Exam 2)
What are the ways to analyze cost behavior? Define them. (CHP 6) (Exam 2)
What is Variable Costing? How is it different from absorption costing?Give formula. (CHP 6) (Exam 2)
What is Absorption costing? How is it different from Variable costing? Give formula. (CHP 6) (Exam 2)
Differentiate between Linear regression and Multiple Regression. What are they used for? (CHP 6) (Exam 2)
