Managerial Accounting Flashcards
Managerial accounting?
Creates confidential information for internal use for managers in decision making and running the business
Managers use accounting info internally TO… (3)
- to work out pricing strategies
- to determine the price of products and services
- to plan and control the business
Consolidate?
Bring together, unite, combine
Iterative?
Repetitive
Master budget?
Budgeted income statement, cash budget and budgeted statement of financial position. Basis for benchmarking.
Zero-based budgeting?
Start budgeting from scratch, without considering previous years budgets
Incremental budgeting?
Taking previous years budget and adjusting it.
Manufacturing overhead?
Any other manufacturing cost not included under direct materials and direct labour.
Incremental costs?
Opportunity costs?
- they arise from the given decision
- revenue lost from alternative options
Prime costs?
Cost driver?
- direct costs incurred
- the primary factor that causes costs
Variable costs?
Fixed costs?
- change in total in direct proportion to change in volume of activity
- to not change in total as volume changes.
Conversion costs?
Costs of converting direct material to finished products.