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MGMT 501 > Final Exam quizlet > Flashcards

Final Exam quizlet Flashcards

1
Q

Provides financial and nonfinancial information to an organization’s managers

A

What is managerial accounting?

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2
Q
  1. Determining the costs of an organization’s products and services
  2. planning future activities 3. comparing actual results to planned results
A

What is the purpose of managerial accounting?

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3
Q

Key differences between managerial and financial accounting

A

Managerial Accounting: Internal users, no GAAP rules, available quickly without audit, uses real time information, focuses on the company’s project, processes and divisions, mostly monetary

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4
Q

What is the fraud triangle?

A

Opportunity: A person must be able to commit fraud with low risk of getting caught
Pressure: A person must feel pressure
Rationalization: Justifies fraud or does not see its criminal nature

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5
Q

Uses of the internal control system

A

-Ensures reliable accounting
-Protects Assets
-Uphold company policies
-Promote efficienct

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6
Q

Beliefs that distinguish right from wrong (accepted standards of good and bad behavior)

A

Ethics

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7
Q

Requires that management accountants be competent, maintain confidentiality, act with integrity and communicate information in a fair and credible manner

A

Institute of Management Accounting (IMA) Requirements

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8
Q

Product, process, department, or customer to which costs are assigned

A

Cost Object

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9
Q

Costs that can be cost-effectively traced to a cost object and consist of direct materials and direct labor

A

Direct Costs

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10
Q

Costs that cannot be cost-effectively traced to a cost object

A

Indirect Costs

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11
Q

Raw material that physically becomes part of the product and is clearly identified with specific (batches) of products

A

Direct Materials

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12
Q

Costs for direct materials that can be cost-effectively traced through the manufacturing process to finished goods

A

Direct Material Costs

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13
Q

Work of employees who physically convert materials to finished products

A

Direct Labor

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14
Q

Wages and salaries for direct labor that are separately traced through the production process to finished goods

A

Direct Labor Costs

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15
Q

All manufacturing costs that are not direct materials or direct labor

A

Factory Overhead

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16
Q

Manufacturing costs that cannot be cost-effectively traced to finished goods

A

Factory Overhead Costs

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17
Q

Materials used in manufacturing that cannot be cost-effectively traced to finished goods

A

Indirect Materials

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18
Q

Labor needed in manufacturing that cannot be cost-effectively traced to finished goods

A

Indirect Labor

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19
Q

Other Indirect Costs Include:

A

Factory utilities

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20
Q

Total Manufacturing Goods (Equation)

A

Direct Materials + Direct Labor + Factory Overhead

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21
Q

Conversion Costs (Equation)

A

Direct Labor + Factory Overhead

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22
Q

Prime Costs (Equation)

A

Direct Materials + Direct Labor

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23
Q

Costs necessary to create a product. Capitalized as inventory because they produce benefits expected to have future value (direct materials and labor, overhead costs)

A

Product Costs

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24
Q

Non-production costs linked to a time period (not to specific products). Expenses in the period when incurred and reported on income statement as selling or general and administrative expenses

A

Period Costs

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25
Q

Total Nonmanufacturing Costs (Equation)

A

Selling expenses + General and admin expenses

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26
Q

Costs of materials a company acquires to use in making products

A

Raw Materials Inventory

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27
Q

Consists of the cost of direct materials, direct labor, and overhead for partially completed products

A

Work in Process Inventory

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28
Q

Costs of direct materials, direct labor, and overhead of completed products ready for sale

A

Finished Goods Inventory

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29
Q

How many inventory types of inventory does a manufacturer, merchandiser, and service company report on balance sheet?

A

manufacturer: 3 types
merchandiser: 1 type
service company: 0

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30
Q

Cost of Goods Sold (Merchandiser equation)

A

Beginning Merchandise Inventory + Costs of Merchandise Purchased - Ending Merchandise Inventory

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31
Q

Cost of Goods Sold (Manufacturer equation)

A

Beginning Finished Goods Inventory + Costs of Goods Manufactured - Ending Finished Goods Inventory

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32
Q

Key Difference in Computing Cost of Goods Sold Between Merchandisers and Manufactures:

A
  • Merchandise Inventory (merchandisers) vs. Finished Goods Inventory (manufactures)
    -Merchandisers have cost of merchandise purchased (cost of buying products to sell)
    -Manufacturers have cost of goods manufactured (cost of direct materials, direct labor, and factory overhead in making finished goods)
33
Q

Raw materials are either used in production or remain in raw materials inventory for use in future periods

A

Manufacturing Activities (Materials)

34
Q

Total Raw Materials Available for Use (Equation)

A

RM Inventory, Beginning + RM Purchases

35
Q

Cost of Goods Manufactured (Equation)

A

Direct Materials + Direct Labor + Factory Overhead (finished products)

Carried over to current period income statement in the computation of costs of goods sold

36
Q

Ending Work in Process Inventory (Equation)

A

Direct Materials + Direct Labor +Factory Overhead (unfinished products)

Carried over to the current period balance sheet

37
Q

Costs of finished goods sold is reported on income statement. Cost of any finished good not sold is a current asset (finished goods inventory) on the balance sheet

A

Sales Activity

38
Q

Total Finished Goods Available for sale (Equation)

A

Finished Goods Inventory, Beginning + Cost of Goods Manufactured

39
Q

Schedule of Costs of Goods Manufactured

A
  1. Compute Direct Materials Used
  2. Compute Direct Labor Used
  3. Compute Factory Overhead
  4. Compute Cost of Goods Manufactured
40
Q

Combines machines, computers, and human control to manufacture products

A

Digital Manufactuirng

41
Q

Managers and Employees understand the changing needs of customers and align operations accordingly

A

Customer Orientation

42
Q

Expands competitive boundaries and provides customers more choices

A

Global Economy

43
Q

Online Transactions

A

E-Commerce

44
Q

Goal is to eliminate waste while “satisfying the customer” and “providing a positive return” to the company

A

Lean Business Model

45
Q

Requires every employee to continually look to improve operations

A

Continuous Improvement

46
Q

Focuses on quality improvement to business activites

A

Total Quality Management

47
Q

Process of acquiring or producing inventory only when needed

A

Just-IN-Time Manufacturing

48
Q

Series of activities that add value to a company’s products or services

A

Value Chain

49
Q

Focuses on 3 measures: Environmental, Economic, and Social

A

Triple Bottom Line

50
Q

Raw Materials Inventory Turnover

A

Raw Materials Used / Average Raw Materials Used

Reveals how many times a company turns over (uses in production) its raw materials inventory

51
Q

Days’ Sales in Raw Materials Inventory

A

Ending Raw Materials Inventory / Raw Materials Used x 365

Measure of how long it takes raw materials to be used in production

52
Q

Accumulates production costs and assigns them to products and services (managers use this information to control costs and set selling price)

A

Cost accounting system

53
Q

Production of special-order products

A

Job order production

54
Q

Production of a customized product or service

A

Job

55
Q

Production of more than one unit of a customized product or service

A

Job Lot

56
Q

Mass production of large quantities of similar products in a continuous flow of steps

A

Process Operation

57
Q

While a job is being produced, its costs are recorded here (all jobs not yet done)

A

Work in process inventory

58
Q

When a job is finished, its total costs are transferred from work in process inventory to here (all jobs complete but not yet sold)

A

Finish Goods Inventory

59
Q

When a finished job is delivered to a customer, its total costs are transferred from finished goods inventory to here (all jobs sold in that period)

A

Cost of goods sold

60
Q

Cost accounting system to determine the cost of producing each job or job lot

A

Job Order Costing System

61
Q

Cost recorded maintained for each job

identifies the customer, job number, the costs, and key dates

includes direct material and labor costs

A

Job cost sheet

62
Q

Total job cost (equation)

A

Direct Labor + Direct Materials + Overhead (estimate) `

63
Q

Form used to report that ordered goods were received and to describe their quantity and condition

A

Receiving report

64
Q

Perpetual record updated each time materials are purchased or issues for production use

A

Materials Ledger Card

65
Q

Purchasing raw materials for production

A

Raw materials inventory (D)
Accounts payable (C)

66
Q

Source document to track how much time employees spend on each job

A

Time ticket

67
Q

Requires managers to estimate total overhead costs because they need to set prices and monitor job profitability

A

Overhead process

68
Q

Predetermined over head rate (equation and step for over head process)

A

Step 1

Estimated overhead costs/Estimated base activity

Estimated activity base: measure of production

69
Q

Apply Estimated overhead to jobs (step and equation for overhead process)

A

Applied overhead = overhead rate x actual amount of activity base used

step 2

70
Q

Record actual overhead (step for overhead process)

A

3

71
Q

Record indirect materials used (over head process)

A

Factory overhead (D)
Raw materials inventory (C)

72
Q

Record indirect labor used (overhead process)

A

Factory overhead (D)
Factory wages payable (C)

73
Q

Record other overhead costs

A

Factory overhead (D)

Accumulated Depreciation
Rent payable
Utilities payable
Prepaid insurance (all credit)

74
Q

the remaining debt balance when actual overhead is more than applied overhead (jobs not charged enough overhead)

A

Under-applied overhead

75
Q

resulting credit balance when actual overhead is less than applied overhead (job charged too much, cogs is overcosted)

A

Over applied overhead

76
Q

Close under applied costs (step 4 overhead costs)

A

COGS (D)
Factory overhead (C)

77
Q

Close over applied costs (step 4 overhead costs)

A

Factory overhead (D)
COGS (C)

78
Q
A

MGMT 501 (2 decks)

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