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Universities » Howard University (Howard) » ACCT - Accounting » 202 - Acct Principles II » Flash Cards

Chapter 14 Managerial Accounting Concepts & Princi.. - Flashcards

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Class:	ACCT 202 - Acct Principles II
Subject:	Accounting
University:	Howard University
Term:	Fall 2011

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Managerial Accounting

An Activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

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Control

The process of monitoring planning decisions and evaluating an organization's activities and employees

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Internal Control System

Monitors and controls business Activities

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Institute of Management Accountants

Professional association for mangement accountants, has issued a code of ethics to help accountants involved in solving ethical dilemmas

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Cost Object

Product , Process, Department, or customer to which costs are assigned.

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Direct Costs

Those traceable to a single cost object

ex. If a product is a cost object, its material and labor costs are usually directly traceable

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Indirect Costs

Are those that cannot be easily and cost-beneficially traced to a single cost object

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Sunk Cost

A Cost that has already been incurred and cannot be avoided or changed

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Out-Of-Pocket Cost

Requires a future outlay of cash and is relevant for decision making

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Opportunity Cost

is the potential benefit lost by choosing a specific action from two or more alternatives

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Product Costs

Refers to expenditures necessary and integral to finished products. They include direct materials, direct labor and indirect manufacturing costs called overhead costs

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Period Costs

Refers to expenditures identified more with a time period than with finished products. They include selling and general administrative expenses

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Raw Materials Inventory

Refers to the goods a company acquires to use in making products. It uses raw materials in two ways: directly and indirectly.

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Indirect Materials

They are not clearly identified with specific product units or batches.

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Goods In Process Inventory

Consists of products in the process of being manufactured but not yet complete

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Finished Goods Inventory

Consists of completed products ready for sale

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Direct Materials

Tangible components of a finished Product

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Direct Material Costs

Expenditures for direct materials that are separately and readily traced through the manufacturing process to finished goods.

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Direct Labor

Refers to the efforts of employees who physically convert materials to finished product.

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Direct Labor Costs

Are the wages and salaries for direct labor that are separately and readily traced through the manufacturing process to finished goods

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Indirect Labor

Cost of other workers on the assembly line who assist direct laborers.

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Indirect Labor

manufacturing workers' efforts not linked to specific units or batches of the product

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Factory Overhead

Consists of all manufacturing costs that are not direct materials or direct labor

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Factory overhead costs

Cannot be separately or readily traced to finished goods

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Prime Costs

Expenditures directly associated with the manufacture of finished goods.

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Conversion Costs

Expenditures incurred in the process of converting raw materials to finished goods

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Managerial Accounting	An Activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.
Control	The process of monitoring planning decisions and evaluating an organization's activities and employees
Internal Control System	Monitors and controls business Activities
Institute of Management Accountants	Professional association for mangement accountants, has issued a code of ethics to help accountants involved in solving ethical dilemmas

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Cost Object	Product , Process, Department, or customer to which costs are assigned.
Direct Costs	Those traceable to a single cost object ex. If a product is a cost object, its material and labor costs are usually directly traceable
Indirect Costs	Are those that cannot be easily and cost-beneficially traced to a single cost object
Sunk Cost	A Cost that has already been incurred and cannot be avoided or changed

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Koofers.com

Out-Of-Pocket Cost	Requires a future outlay of cash and is relevant for decision making
Opportunity Cost	is the potential benefit lost by choosing a specific action from two or more alternatives
Product Costs	Refers to expenditures necessary and integral to finished products. They include direct materials, direct labor and indirect manufacturing costs called overhead costs
Period Costs	Refers to expenditures identified more with a time period than with finished products. They include selling and general administrative expenses

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Koofers.com

Raw Materials Inventory	Refers to the goods a company acquires to use in making products. It uses raw materials in two ways: directly and indirectly.
Indirect Materials	They are not clearly identified with specific product units or batches.
Goods In Process Inventory	Consists of products in the process of being manufactured but not yet complete
Finished Goods Inventory	Consists of completed products ready for sale

Generated by

Koofers.com

Direct Materials	Tangible components of a finished Product
Direct Material Costs	Expenditures for direct materials that are separately and readily traced through the manufacturing process to finished goods.
Direct Labor	Refers to the efforts of employees who physically convert materials to finished product.
Direct Labor Costs	Are the wages and salaries for direct labor that are separately and readily traced through the manufacturing process to finished goods

Generated by

Koofers.com

Indirect Labor	Cost of other workers on the assembly line who assist direct laborers.
Indirect Labor	manufacturing workers' efforts not linked to specific units or batches of the product
Factory Overhead	Consists of all manufacturing costs that are not direct materials or direct labor
Factory overhead costs	Cannot be separately or readily traced to finished goods

Generated by

Koofers.com

Prime Costs	Expenditures directly associated with the manufacture of finished goods.
Conversion Costs	Expenditures incurred in the process of converting raw materials to finished goods

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Koofers.com

List View: Terms & Definitions

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	Managerial Accounting	An Activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.
	Control	The process of monitoring planning decisions and evaluating an organization's activities and employees
	Internal Control System	Monitors and controls business Activities
	Institute of Management Accountants	Professional association for mangement accountants, has issued a code of ethics to help accountants involved in solving ethical dilemmas
	Cost Object	Product , Process, Department, or customer to which costs are assigned.
	Direct Costs	Those traceable to a single cost object ex. If a product is a cost object, its material and labor costs are usually directly traceable
	Indirect Costs	Are those that cannot be easily and cost-beneficially traced to a single cost object
	Sunk Cost	A Cost that has already been incurred and cannot be avoided or changed
	Out-Of-Pocket Cost	Requires a future outlay of cash and is relevant for decision making
	Opportunity Cost	is the potential benefit lost by choosing a specific action from two or more alternatives
	Product Costs	Refers to expenditures necessary and integral to finished products. They include direct materials, direct labor and indirect manufacturing costs called overhead costs
	Period Costs	Refers to expenditures identified more with a time period than with finished products. They include selling and general administrative expenses
	Raw Materials Inventory	Refers to the goods a company acquires to use in making products. It uses raw materials in two ways: directly and indirectly.
	Indirect Materials	They are not clearly identified with specific product units or batches.
	Goods In Process Inventory	Consists of products in the process of being manufactured but not yet complete
	Finished Goods Inventory	Consists of completed products ready for sale
	Direct Materials	Tangible components of a finished Product
	Direct Material Costs	Expenditures for direct materials that are separately and readily traced through the manufacturing process to finished goods.
	Direct Labor	Refers to the efforts of employees who physically convert materials to finished product.
	Direct Labor Costs	Are the wages and salaries for direct labor that are separately and readily traced through the manufacturing process to finished goods
	Indirect Labor	Cost of other workers on the assembly line who assist direct laborers.
	Indirect Labor	manufacturing workers' efforts not linked to specific units or batches of the product
	Factory Overhead	Consists of all manufacturing costs that are not direct materials or direct labor
	Factory overhead costs	Cannot be separately or readily traced to finished goods
	Prime Costs	Expenditures directly associated with the manufacture of finished goods.
	Conversion Costs	Expenditures incurred in the process of converting raw materials to finished goods

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