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Cost Accounting > Manager and Management Accounting > Flashcards

Manager and Management Accounting Flashcards

1
Q

Measures, analyzes, and reports financial and nonfinancial information that helps managers make decisions to fulfill organizations goals.

A

Management Accounting

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2
Q

Need not to be GAAP compliant.

A

Management Accounting

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3
Q

Managers use this to develop, communicate, and implement strategies, coordinate product design, production, and marketing decisions and evaluate a company’s performance.

A

Management Accounting Information

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4
Q

It focuses on reporting financial information to external parties such as investors, government agencies, banks, and suppliers, based on GAAP.

A

Financial Accounting

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5
Q

Measures, analyzes and reports financial and nonfinancial information related to the costs of acquiring or using resources in an organization.

A

Cost Accounting

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6
Q

It part of the information collected to make management decisions.

A

Cost Information

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7
Q

The purpose of information is to help managers make decisions to fulfill an organization’s goals.

A

Management Accounting

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8
Q

The primary users of management accounting are:

A

Managers of the organization

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9
Q

The focus and emphasis of management accounting is..

A

It is future-oriented.

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10
Q

The rules and measurement of reporting for management accounting is..

A

Internal measures and reports do not have to follow GAAP.e

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11
Q

The internal measures and reports of management accounting are based on..

A

Cost-benefit analyses

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12
Q

The time span of reports management accounting use…

A

Varies from hourly information to 15 to 20 years.

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13
Q

The type of reports management accounting use

A

Financial and nonfinancial reports on products, departments, territories, and strategies.

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14
Q

The behavioral implications of management accounting is..

A

Designed to influence the behavior of managers and employees

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15
Q

Its purpose is to communicate an organization’s financial position to investors, banks, regulators, and other external parties.

A

Financial accounting

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16
Q

Its external users are investors, banks, regulators, and suppliers.

A

Financial Accounting

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17
Q

It is past-oriented. Reports on 2016 performance prepared in 2017.

A

Financial Accounting

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18
Q

It must be prepared in accordance with GAAP.

A

Financial AccountingF

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19
Q

Financial accounting reporting must be certified by?

A

External, independent auditors

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20
Q

How are the financial reports of financial accounting are prepared?

A

Annually and quarterly reports, primarily on the company as a whole.

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21
Q

It primarily reports economic events but also influences behavior because manager’s compensation is often based on reported financial results.

A

Financial Accounting

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22
Q

It specifies how an organization matches its own capabilities with the opportunities in the marketplace

A

Strategy

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23
Q

What are the two broad strategies?

A

Cost leadership and product differentiation

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24
Q

It describes cost management that specifically focuses on strategic issues

A

Strategic Cost Management

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25
Q

It helps managers formulate strategy by answering questions like who are the company’s most important customers, what is the bargaining power of both supplier and customers, what substitute products exist and how do they differ, and if how the strategy is to be funded.

A

Management accounting information

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26
Q

Creating _______ is an important part of planning and implementing strategy.

A

Value

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27
Q

It is the usefulness a customer gains from a company’s product or service.

A

Value

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28
Q

It determines the value a customer derives from a product.

A

Customer experience

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29
Q

It is the sequence of business functions by which a product is made progressively more useful to customers.

A

Value Chain

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30
Q

Which of the following is consist the value chain?
i. Research and Development
ii. Design of Products and Processes
iii. Marketing
iv. Distribution
v. Customer Service

A

All of the above

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31
Q

It deals with generating and experimenting with ideas related to new products, services, or processes.

A

Research and Development

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32
Q

It is the detailed planning, engineering, and testing of products and processes.

A

Design of products and processes

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33
Q

It is the procuring, transporting and storing and coordinating and assembling resources to produce a product or deliver a service.

A

Production

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34
Q

It is a term for the procuring, transporting, and storing resources.

A

Inbound Logistics

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35
Q

It is the coordinating and assembling of resources to produce a product or deliver a service.

A

Operations

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36
Q

It includes promoting and selling products or services to customers or prospective customers.

A

Marketing

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37
Q

It is providing after-sales services to customers

A

Customer Service

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38
Q

The processing of orders and shipping products or services to customers.

A

Distribution

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39
Q

The processing of orders and shipping products or services to customers in the distribution function of the business is also called?

A

Outbound Logistics

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40
Q

It is a strategy that integrates people and technology in all business functions to deepen relationships with customers, partners, and distributors.

A

Customer Relationship Management

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41
Q

It is a strategy that profit and grow by providing quality products or services at low prices and by judiciously managing their costs.

A

Cost Leadership Strategy

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42
Q

It is a strategy that generate profits and growth by offering differentiated or unique products or services that appeal to their customers and are often priced higher than competitors.

A

Product Differentiation Strategy

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43
Q

CRM initiatives use of __________ to coordinate all customer-facing activities and design and production activities necessary to get products to customers.

A

Technology

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44
Q

Parts of the value chain associated with producing and delivering a product or service.

A

Production and Distribution

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45
Q

Production and distribution function together are known as the…

A

Supply Chain

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46
Q

It describes the flow of goods, services, and information from the initial source to their delivery regardless of whether the activities occur in one or multiple organizations.

A

Supply Chain

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47
Q

What are the five key success factors?

A

Cost and efficiency, quality, time, innovation, and sustainability

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48
Q

To achieve _______ managers eliminate some activities and reduce costs of performing other activities in all value-chain functions.

A

Target cost

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49
Q

It is the reduction of overall costs and improving efficiency to generate more income.

A

Cost and efficiency

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50
Q

An integrative philosophy of management for continuously improving the quality of products and processes.

A

Total Quality Management

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51
Q

It has many dimensions.

A

Time

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52
Q

The time it takes for companies to create new products or services and bring them to the market.

A

New-product Development Time

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53
Q

It describes the speed at which an organization respond to customer requests.

A

Customer-response Time

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54
Q

It is the primary cause of delays.

A

Bottlenecks

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55
Q

A point of congestion in a production system that prevents it from functioning at full speed.

A

Bottleneck

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56
Q

It when the work to be performed on a machine or facility exceeds its available capacity.

A

Bottleneck

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57
Q

Its constant flow is the basis for the ongoing success of a company.

A

Innovation

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58
Q

It is applying the key success factors of cost and efficiency, quality, time and innovation to promote ___________.

A

Sustainability

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59
Q

The development and implementations of strategies to achieve long-term financial, social, and environmental goals.

A

Sustainability

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60
Q

It serves as a benchmark managers use to continuously improve their operations.

A

Competitive Information

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61
Q

The Five-Step Decision-Making Process.

A

A. Identify the problem and uncertainties
B. Obtain Information
C. Make predictions of the future
D. Make decisions by choosing among the alternatives
E. Implement the decision, evaluate performance, and learn

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62
Q

It consists of selecting an organization’s goals and strategies.

A

Planning

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63
Q

It predicting results under various alternative ways of achieving those goals.

A

Planning

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64
Q

It is communicating the goals and how to achieve them to the entire organization.

A

Planning

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65
Q

They serve as business partners in these planning activities because they understand key success factors and what creates value.

A

Management Accountant

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66
Q

What is the role of the five-step decision-making process?

A

Planning and control of operations and activities

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67
Q

How do management accountants help firms make strategic decisions?

A

By providing information about the sources of competitive advantage

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68
Q

The quantitative expression of a proposed plan of action by the management and is an aid to coordinating what needs to be done to execute the plan.

A

Budget

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69
Q

The most important planning tool when implementing strategies.

A

Budget

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70
Q

It comprises taking actions that implement the planning decision, evaluating past performance, and providing feedback and learning.

A

Control

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71
Q

Helps management accountants provide the most value to the strategic and operational decision making of their companies.

A

Management Accounting Guidelines

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72
Q

Compares the benefits of an action/purchase to the costs. The benefits should exceed the costs.

A

Cost-benefit Approach

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73
Q

Recognizes that management is primarily a human activity that should focus on encouraging individuals to do their jobs better.

A

Behavioral and technical considerations

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74
Q

Managers use alternative ways to compare costs in different decision-making situations because there are ________.

A

Different costs for different purposes

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75
Q

Helps managers make wise economic decisions by providing desired information in an appropriate format and at a preferred frequency.

A

Technical considerations

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76
Q

Are directly responsible for achieving the goals of the organization.

A

Line Management

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77
Q

Provides advice, support, and assistance to line management.

A

Staff Management

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78
Q

Includes production, marketing and distribution management.

A

Line Management

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79
Q

Includes management accountants, information technology, and human resource management.

A

Staff Management

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80
Q

The chief financial officer is also called the _______.

A

Finance Director

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81
Q

He is responsible for overseeing the financial operations of an organization.

A

Chief Financial Officer

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82
Q

What are the six responsibilities of a CFO?

A

Controllership
Tax
Treasury
Risk Management
Investor Relations
Strategic Planning

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83
Q

Provides financial information for reports to managers and shareholders and oversees the overall operations of the accounting system.

A

Controllership

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84
Q

Plans income taxes, sales taxes, and international taxes.

A

Taxes

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85
Q

Oversees banking and short and long-term financing, investments, and cash management.

A

Treasury

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86
Q

Manages the financial risk of interest and exchange rate changes and derivatives management.

A

Risk Management

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87
Q

Communicates with, responds to, and interacts with shareholders.

A

Investor Relation

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88
Q

Defines strategy and allocates resources to implement strategy.

A

Strategic Planning

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89
Q

The controller is also known as?

A

Chief Accounting Officer

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90
Q

The financial executive primarily responsible for management accounting and financial accounting.

A

Controller

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91
Q

The controller exercises control by?

A

By reporting and interpreting relevant data

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92
Q

A staff manager that reports to the CEO

A

CFO

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93
Q

Value is quickly destroyed by?

A

Unethical behavior

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94
Q

True or False. The statement of ethical professional practice
stipulates that members of IMA shall behave ethically. A commitment to the ethical professional practice includes overarching principles that express our values, and standards that guide our conduct.

A

True

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95
Q

It was passed in the United States as a response to a series of corporate scandals.

A

Sarbanes-Oxley legislation 2002

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96
Q

The Sarbanes-Oxley legislation authorizes this to oversee, review, and investigate the work of auditors.

A

Public Company Accounting Board

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97
Q

Employees that report violations of illegal and unethical acts are called?

A

Whistleblowers

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98
Q

The four overarching principles are?

A

Honesty, Fairness, Objectivity, and Responsiblity

99
Q

The Standards of Ethical Behavior are?

A

Competence, Credibility, Confidentiality, and Integrity

100
Q

The act Sarbanes-Oaxley focuses on improving?

A

Internal Controls
Corporate Governance
Monitoring of Managers
Disclosure Practices of Public Companies

101
Q

A single database that collects data and feeds them into applications that support a company’s business activities.

A

ERP System

102
Q

All businesses are concerned about?

A

Cost and revenues

103
Q

A resource sacrificed to achieve a specific objective.

A

Cost

104
Q

Usually measures as a monetary amount that must be paid to acquire cost of goods sold.

A

Cost

105
Q

Cost incurred that is considered historical or past cost.

A

Actual Cost

106
Q

A predicted, forecasted cost.

A

Budgeted Cost

107
Q

Anything for which a measurement is desired.

A

Cost Object

108
Q

A cost system determine the costs of various cost objects in two stages:

A

Accumulation followed by Assignment

109
Q

The collection of cost data in some organized way by mean of an accounting system

A

Cost Accumulation

110
Q

Favorable means?

A

Not exceeding the budget.

111
Q

Unfavorable means?

A

Exceeding the budget.

112
Q

Related to the particular cost object and can be traced to it.

A

Direct Costs

113
Q

Used to describe the assignment of direct costs to a particular cost object.

A

Cost Tracing

114
Q

Related to the particular cost object but cannot be traced to it.

A

Indirect Costs

115
Q

Used to describe the assignment of indirect costs to a cost object.

A

Cost Allocation

116
Q

General term that encompasses both tracing and allocation of direct and indirect costs.

A

Cost Assignment

117
Q

What are the factors affecting direct and indirect costs?

A

Materiality of the cost
Available information-gathering technology
Design of Operations

118
Q

The smaller the amount of the cost, the less likely it is cost-effective to trace it.

A

Materiality Of the Cost

119
Q

Improvements in information-gathering technology make it possible to consider more and more costs as ___________.

A

Direct costs, availability of information-gathering technology

120
Q

Classifying a cost as direct is easier if the facility is used exclusively for a specific cost object.

A

Design of Operations

121
Q

Can maybe both direct cost of one cost object and indirect cost to another.

A

Specific Cost

122
Q

The classification depends on the?

A

Choice of cost object.

123
Q

Records the cost of resources acquires and track how those resources are used to produce and sell products/services.

A

Costing System

124
Q

Changes in total proportion and is constant in a per unit basis.

A

Variable Costs

125
Q

Two ways which costs behave:

A

Variable and Fixed

126
Q

It is used to describe the variable cost behavior.

A

Strictly variable or Proportionately variable

127
Q

Always focus on the _________ when considering both variable and fixed costs.

A

Total Costs

128
Q

Reducing fixed costs requires __________ on the part of managers.

A

Active Intervention

129
Q

Cost that has both variable and fixed elements.

A

Mixed or Semivariable Costs

130
Q

A variable, such that level of activity or volume, that casually affects costs over a given time span.

A

Cost Driver

131
Q

An event, task, unit of work with a specified purpose - designing, testing, setup.

A

Activity

132
Q

There is a cost driver in variable costs and only in the long run for fixed costs. True or False.

A

True

133
Q

Activity-based Costing Systems

A

Costing systems that identify the cost of each activity.

134
Q

The band or range of normal activity or volume in which there is a specific relationship between level of activity and the cost in question.

A

Relevant Range

135
Q

Variable costs only change proportionately with changes in volume outside the relevant range. True or False?

A

False

136
Q

Also called an average cost.

A

Unit Cost

137
Q

Three types of manufacturing inventories.

A

Direct Materials Inventory
WIP inventory
Finished-Goods Inventory

138
Q

The merchandising only holds on type of inventory which is?

A

Merchandise Inventory

139
Q

What are the three manufacturing costs?

A

Direct Materials
Direct Labor
Manufacturing Overhead or Indirect Manufacturing Overhead Costs

140
Q

What are considered prime costs?

A

Direct Materials and Direct Labor

141
Q

What are considered conversion costs?

A

Direct Labor
Factory Overhead Costs

142
Q

All costs of the product that are considered assets in a company’s balance sheet when costs are incurred and expensed as COGS when product is sold.

A

Inventoriable Costs

143
Q

Inflows of assets received for products customers purchase.

A

Revenue

144
Q

Includes all manufacturing costs to produce them.

A

Cost of Goods Sold

145
Q

All costs in the income statement other than the cost of goods sold.

A

Period Costs

146
Q

Refers to the cost that are treated as expenses of the accntng period in which they are incurred. E.g. Design, marketing, and customer service cost.

A

Period Costs

147
Q

In manufacturing companies, what is considered period costs?

A

All nonmanufacturing costs

148
Q

In merchandising sectors, what is considered period costs?

A

All costs not related to Cost of Goods Purchased for Sale

149
Q

It is a key driver of success.

A

Innovation

150
Q

Are research and development costs inventoriable or period costs?

A

Period cost

151
Q

What are the four steps for the flow and of revenue and costs for a manufacturing company?

A
  1. Cost of Direct Materials Used
  2. Total Manufacturing Costs Incurred
  3. Cost of Goods Manufactured
  4. Cost of Goods Sold
152
Q

Refers to the cost of goods brought to completion, whether they were started before or during the period.

A

Cost of Goods Manufactured

153
Q

It is the cost of finished-goods inventory sold to customers during the current period.

A

Cost of Goods Sold

154
Q

The equation Revenues - Cost of COGS give rise to?

A

Gross Margin or Gross Profit

155
Q

What is the equation for Operating Income?

A

Total Rev - COGS - Operating Expenses = Operating Income

156
Q

All direct manufacturing costs are called?

A

Prime Costs

157
Q

It represents all manufacturing costs incurred to convert direct materials into finished goods.

A

Conversion Costs

158
Q

Measuring costs require?

A

Judgment

159
Q

Overtime and Idle time pay are considered manufacturing overhead or manufacturing labor?

A

Manufacturing Overhead

160
Q

It is the wage rate paid to workers in excess of their straight-time wage rates.

A

Overtime Premium

161
Q

Refers to the wages paid for unproductive time caused by lack of orders, machine or computer breakdowns, work delays, and the like.

A

Idle Time

162
Q

It includes employer payments for employee benefits.

A

Payroll Fringe Costs

163
Q

Is payroll fringe cost a direct or indirect labor?

A

Direct Labor

164
Q

It is the time spent by direct laborers for correcting errors.

A

Rework Labor

165
Q

It is the sum of the costs assigned to a product for a specific purpose.

A

Product Cost

166
Q

For the purpose of making decisions about pricing and promoting products that generate the most profits.

A

Product and product-mix decisions

167
Q

A contract such as this is referred to as a cost-plus agreement.

A

Reimbursement under government contracts

168
Q

Are typically used for services and development contracts.

A

Cost-plus agreement.

169
Q

What are the three framework for cost accounting and cost management?

A
  1. Calculating cost of products, services, and other cost objects.
  2. Obtaining information for planning and control and performance evaluation.
  3. Analyzing relevant information for making decisions.
170
Q

Is the most commonly used tool for planning and control.

A

Budgeting

171
Q

It forces managers to look ahead, to translate a company’s strategy into plans.

A

Budget

172
Q

An analysis used to study the behavior and relationship among these elements as changes occur.

A

Cost-Volume-Profit Analysis

173
Q

The difference between total revenues and total variable costs.

A

Contribution Margin

174
Q

A useful tool for calculating contribution margin and operating income.

A

Contribution Margin Per Unit

175
Q

The quotient between contribution margin and revenues.

A

Contribution margin percentage

176
Q

A useful tool for calculating how a change in revenues changes contribution margin.

A

Contribution margin percentage

177
Q

A widely used technique to evaluate how sales fluctuations affect profitability.

A

Contribution Margin Analysis

178
Q

Three ways to express CVP relationships.

A

Equation method, contribution margin method, and graph method

179
Q

The number of units sold is the only cost driver in CVP relationship. True or False

A

True

180
Q

Total costs can be separated into two components, what are these two?

A

Fixed and variable component

181
Q

A variable, such as volume, that casually affects revenues.

A

Revenue Driver

182
Q

The quantity of outputs sold at which total revenue equal total cost - 0 result of operating income.

A

Breakeven Point

183
Q

A graph that shows how changes in quantity of units sold affect operating income.

A

PV graph

184
Q

Is operating income plus nonoperating income minus nonoperating costs minus income taxes.

A

Net Income

185
Q

Three ways to use CVP Analysis in decision making includes decision to advertise, decision to reduce selling price, and determining target price.
True or False?

A

True

186
Q

Decisions that entail risk.

A

Strategic decisions

187
Q

A what-if technique managers use to examine how an outcome will change if the original predicted data are not achieved.

A

Sensitivity Analysis

188
Q

Answers the what-if question and an important aspect of sensitivity analysis.

A

Margin of Safety

189
Q

It gives managers a good feel for a decision’s risk.

A

Sensitivity Analysis

190
Q

The possibility that an actual amount will deviate from an expected from an expected amount.

A

Uncertainty

191
Q

Use CVP analysis to plan variable and fixed costs to compare risk of losses versus higher returns. True or False

A

True

192
Q

Operating leverage is the measure of ___________ across alternative cost structures.

A

Risk-return tradeoff

193
Q

Describes the effects that fixed costs have on changes in operating income.

A

Operating Leverage

194
Q

The quantities of various products that constitutes a company’s total unit sales.

A

Sales Mix

195
Q

Sales mix of products remains constant as total units sold changes. True or False?

A

True

196
Q

When applying CVP in service and not-for-profit orgs one should define appropriate?

A

Cost measures

197
Q

What is the difference between contribution margin and gross margin?

A

CM provides data for CVP and risk analysis while GM is a measure of competitiveness.

198
Q

It includes all variable manufacturing costs and all fixed costs.

A

Cost of Goods Sold

199
Q

In merchandising, gross margin is equal to contribution margin. True or False

A

True

200
Q

It measures how much a company can charge for its products over and above cost of acquiring/producing them.

A

Gross Margin

201
Q

It indicates how much of a country’s revenues are available to cover fixed costs.

A

Contribution Margin

202
Q

In case of manufacturing, cost of goods sold is equal to the variable cost of goods purchased making both gross margin and contribution margin identical.

A

False. Its only in the merchandising sector that that is the case.

203
Q

The possibility that an actual amount will deviate from an expected amount.

A

Uncertainty

204
Q

A possible relevant occurrence.

A

Event

204
Q

An objective that can be quantified, such as maximize income or minimize costs. Also used by managers to choose the best alternative action.

A

Choice Criterion

205
Q

It is the likelihood or chance that an event will occur.

A

Probability

206
Q

Describes the likelihood, or the probability, that each of the mutually exclusive and collectively exhaustive set of events will occur.

A

Probability Distribution

207
Q

In terms of the choice criterion, it is the predicted economic results of the various possible combinations of actions and events.

A

Outcomes

208
Q

A summary of the alternative actions, events, outcomes, and probability.

A

Decision Table

209
Q

Weighted average of the outcomes, with the probability of each outcome serving as the weight.

A

Expected Value

210
Q

It means that the event becomes known.

A

Uncertainty Resolved

211
Q

Good decisions and good outcome can exist without the other one. True or False?

A

True

212
Q

Decisions could only be made based on the information that is only available at the time of evaluating and making decision. True or False?

A

True

213
Q

It is anything for which a measurement of costs is desired.

A

Cost Object

214
Q

A grouping of individual indirect cost items.

A

Cost Pool

215
Q

A systematic way to link an indirect cost or group of indirect costs to cost objects.

A

Cost-allocation base

216
Q

Two criterions for allocating costs:

A

Benefits Received
Ability to Bear Costs Allocated

217
Q

The cost object is a unit or multiple units of a distinct product or service is called a?

A

Job

218
Q

The cost objects are heterogenous and the cost objects are distinct.

A

Job-Costing System

219
Q

The cost object is masses of identical or homogenous products.

A

Process-Costing System

220
Q

It is used to cost a distinct product.

A

Job-Costing System

221
Q

It is used to cost masses of similar or identical units.

A

Process-Costing System

222
Q

A costing system that traces direct costs to a cost object based on actual direct-cost rates times the actual quantities of direct-cost inputs.

A

Actual Costing

223
Q

What are the two time periods used to compute indirect cost rates?

A

Numerator Reason
Denominator Reason

224
Q

A costing system that traces direct costs to a cost object by using actual direct-cost rate times the actual quantities of direct-cost inputs and allocates indirect costs based on the budgeted indirect-cost rates times the actual quantities of cost-allocation bases.

A

Normal Costing

225
Q

An original record that supports journal entries in an accounting system.

A

Source Document

226
Q

It is used to record and accumulate all costs assigned to a specific job, starting when work begins.

A

Job-Cost Sheet or Job-Cost Record

227
Q

It contains information about the cost of direct materials used on a specific job and department.

A

Materials-requisition record

228
Q

A source document that contains the amount of labor time used for a specific job and department.

A

Labor-time Sheet

229
Q

It presents the total of separate jobs-cost records pertaining to all unfinished jobs.

A

Work-in-Process Control

230
Q

When jobs are completed or sold they are recorded in?

A

Finished-Goods Control

231
Q

Under normal costing, it is the amount of manufacturing overhead costs allocated to individual jobs based on the budgeted rate.

A

Manufacturing Overhead Allocated or Manufacturing Overhead Applied

232
Q

It is the contra account of manufacturing overhead control account.

A

Manufacturing Overhead Applied

233
Q

It gives the birds eye view of the costing system.

A

General Ledger

234
Q

It gives the worm’s eye view of the costing costing system and contains the underlying details.

A

Subsidiary Ledgers

235
Q

This subsidiary ledger is used to continuously record the quantity of materials received.

A

Materials Records by Type of Material

236
Q

This subsidiary ledger is used to trace costs of direct manufacturing labor to individual jobs and to accumulate costs of indirect manufacturing labor.

A

Labor Records by Employee

237
Q

It makes up the subsidiary ledger for the Manufacturing Overhead Control account and shows details of different categories of overhead costs.

A

Manufacturing Department Overhead Records by Month

238
Q

It occurs when the allocated amount of indirect costs in an accounting period is less than the actual amount

A

Underallocated Indirect Costs

239
Q

Occurs when the allocated amount of indirect costs in an accounting period is greater than the actual amount.

A

Overallocated Indirect Costs

240
Q

This approach restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates.

A

Adjusted Allocation-rate Approach

241
Q

This approach spreads under or overallocated amounts among ending WIP inventory, Finished Goods Inventory and Cost of Goods Sold.

A

Proration Approach

242
Q

In this approach, the total under or overallocated manufacturing overhead is included in the COGS.

A

Write-off to COGS Approach

Cost Accounting (1 decks)

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