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Managerial Accountin
Managerial Accounting
| Question | Answer |
|---|---|
| What are Direct Costs? | Direct costs are identified with and can be traced to a cost object. A cost object is anything a business assigns a cost for. For ex, a product or sales territory. |
| What are Direct Costs? | Direct costs are identified with and can be traced to a cost object. A cost object is anything a business assigns a cost for. For ex, a product or sales territory. |
| What are Vertical units? | Often separate businesses within the parent company. These verticals normally develop products that are sold directly to customers. Verticals prepare their own statements. |
| What are Indirect Costs? | Indirect costs cannot be identified with/ traced to a cost object. |
| What are Vertical units? | Often separate businesses within the parent company. These verticals normally develop products that are sold directly to customers. Verticals prepare their own statements. |
| What are Horizonal units? | horizontals do not report profit and loss (P&L) statements. Marketing, human resources, information technology, legal, facilities, accounting, and finance are normally horizontal departments within a company. |
| Direct Materials Cost | The cost of any material that is an integral part of the finished product is classified as a direct materials cost. |
| Direct Labor Costs | The cost of employee wages that is an integral part of the finished product is classified as direct labor cost. |
| Factory Overhead Costs | Costs other than direct materials and direct labor that are incurred in the manufacturing process are combined and classified as factory overhead cost. |
| Prime costs | Prime costs, which consist of direct materials and direct labor costs |
| Conversion Costs | Direct Labor and Factory Overhead |
| Product Costs | Product costs consist of manufacturing costs: direct materials, direct labor, and factory overhead. |
| Period Costs | Period costs consist of selling and administrative expenses. |
| Incurred Product costs get reported where? | Balance sheet as inventory |
| Cost of Goods Sold getting reported where? | Income Statement |
| Period costs get reported where? | Income statement as expenses - Selling & Administrative |
| Materials Inventory | Is the leftover purchased material + any new purchases in the period that have not been used towards a product yet. |
| Work in process inventory | This inventory consists of the direct materials, direct labor, and factory overhead costs for products that have entered the manufacturing process, but are not yet completed (in process). |
| Finished goods inventory | This inventory consists of completed (or finished) products that have not been sold. |
| Cost of goods sold (retail) | materials purchased in period + beginning inventory, subtracted by ending inventory as a way of saying 'we must have sold this much inventory'. |
| Cost of goods manufactured (manufacturing) | The total cost of making and finishing a product. Build a statement of inventory to determine this cost. |
| Cost of direct materials used formula | Cost of available materials (beginning inventory + purchases) - Ending inventory = Cost of direct materials used. |
| Total Manufacturing Costs incurred in Period formula | Cost of direct materials used + Direct labor + Factory overhead costs |
| Total Manufacturing costs formula | Total Manufacturing Costs incurred in Period + Beginning Work in Process inventory (from last period) |
| Cost of goods manufactured formula | Total Manufacturing costs - Ending work in process inventory |
Created by:
Ashley545
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