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Managerial Accountin
| Term | Definition |
|---|---|
| Purpose of Managerial Accounting | Determine costs of products and services Planning future activites Comparing actual to planned results |
| Managerial Accounting skill sets | Have knowledge of Financial accounting Have knowledge of Management accounting Have strong communication skills Have knowledge of how buisnesses work Be a team player |
| Primary users are external | Financial |
| Includes more nonmonetary information | Managerial |
| Focuses more on the future | Managerial |
| Uses many estimates and projections | Managerial |
| Controlled by GAAP | Financial |
| Used in managers' planning decisions | Managerial |
| Focuses on the whole organization | Financial |
| Total fixed cost | Do not change when activity changes |
| Total variable costs | Change in proportion to activity changes. |
| Mixed cost | Refers to a combination of fixed and variable costs. |
| Sunk cost | Has already been incurred and cannot be avoided or changed, so it is irrelevant to decision making. |
| Opportunity cost | The benefit given up after choosing one thing instead of another. |
| Out of pocket cost | Future outlay of money and relevant for current and future decisions. |
| Direct costs | Traceable to a single cost object such as a tire on a bicycle (Must be identifiable and measurable) |
| Indirect costs | Costs that cannot be traced back to a single object such as oil on a bike chain. (Any cost that is split between two departments) |
| Prime cost | Direct material and Direct labor |
| Conversion cost | Direct labor and manufacturing overhead |
| Product cost | Direct material, direct labor, manufacturing overhead |
| Direct Material | Expenditures for direct materials that are separately and readily traced through manufacturing proccess |
| Direct Labor | Wages and salaries that are separately and readily traced through the manufacturing process of finished goods. |
| Factory overhead | All costs that are not direct materials or labor and are not separately traced to finished goods. Can't measure or trace it. |
| Raw material inventory | Materials waiting to be processed. |
| Wok in process inventory | Partially complete products. Includes material to which some labor and/or overhead have been added. |
| Finished goods inventory | Completed products for sale. |
Created by:
Atroyt
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