ACC 211: Final Study Guide
62 Cards in this Set
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decision making
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the process of making choices among alternative possible courses of action
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planning
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setting goals and objectives and how to achieve them
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Directing
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overseeing the company's day-to-day operations.
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controlling
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evaluating the results of business operations against the plan and making adjustments to keep the company pressing toward its goals
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controller
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responsible for general financial accounting, managerial accounting and tax reporting, reports directly to CFO
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Managerial accounting
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the area of accounting that serves the decision-making needs of internal users.
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Financial Accounting
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Aimed at serving external users by providing them with general-purpose financial statements.
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budgets
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quantitative expression of a plan
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board of directors
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elected by stockholders to oversee company
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CEO
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chief executive officer, manages the company on a daily basis
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COO
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Chief Operating Officer, Hired by the CEO and is responsible for the company's operations, such as research and development (R&D), production and distribution
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CFO
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Chief Financial Officer, directs and coordinates the financial activities of the firm and supervises controller and treasurer.
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Treasurer
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raises capital and manages cash and investments
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Internal audit function
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Ensures that internal controls are working properly
Reports to audit committee
May also report to CFO and CEO
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audit committee
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oversees the internal audit function as well as the annual audit of the financial statements by independent CPAs.
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Cross Functional Teams
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Members from different departments meet periodically to solve common problems and coordinate across the departments
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Institute of Management Accountants
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professional association for management accountants
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Sarbanes-Oxley Act of 2002
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an act passed by Congress to restore public confidence and trust in financial statements of companies
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sustainability
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the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs
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what is the triple bottom line?
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recognizes that a companies performance should not only be viewed in terms of its ability to generate economic profit for its owners but also by its impact on people and the planet.
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Enterprise Resource Planning (ERP)
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systems are applications software that attempts to intergrate all data and processes of an entire business into one intergratted system
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Lean thinking
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both a philosophy and a business strategy of operating without waste
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Just-in-time
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A management philosophy that consists of planning the manufacturing of goods in such a way that they are produced just before they are needed in the next step of the assembly process.
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throughput time
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the amount of time required to turn raw materials into completed items.
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total quality management
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delight customers by providing them with superior products and services
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return on investment
(ROI)
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operating income/total assests
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Capital Turnover for ROI
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Sales / Total assets
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Payback period
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amt. invested/exp. annua net cash inflow
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Accounting Rate of Return (ARR)
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(Average annual net cash inflow - Annual depreciation expense) / Initial investment
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Annual depreciation
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(initial investment- residual value)/ useful life of asset
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standard direct materials cost (DM)
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standard price dm x standard quantity dm
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standard cost of direct labor
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standard qty of DL * standard price DL
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standard variable MOH rate
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total est. variable MOH/ total est. amt. of the allocation base
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variable moh per unit
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standard qty. of allocation base * variable MOH rate
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standard fixed MOH rate
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total est. fxed MOH/ total est. amt of the allocation base
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standard fixed MOH per unit
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standard qty. of allocation base*fixed MOH base
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DM variance price
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AQ(AP-SP)
AP= actual cost of material purchased/actual mat. purch.
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DM quantity variance
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SP(AQU-SQA)
SQA= actual output
* standard qty per unit of output
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DL rate variance
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AH(AR-SR)
AR=actual total labor cost/actual hours worked
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Dl efficiency variance
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SR=(AH-SHA)
SHA= actual output * standard labor hours per unit of output
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fixed overhead budget variance
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actual fixed overhead- budgeted fixed overhead
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fixed overhead volume variance
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budgeted fixed overhead- (SHA*SR)
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Prime Costs
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DL+Dm
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Conver
Conversion cost
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DL+MOH
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Merchandiser-COGS
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Beg. inventory
+purchases
+import duties
+freight-in
=costs of goods available for sale
-Ending inventory
=GOGS
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Income Statement-Merchandiser
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Sales Revenue
-COGS
=gross profit
-Operating Expenses
=operating income
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Manufacture-Cost of Goods Manufactured
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Beg. WIP inventory
+direct labor
+direct material used
+MOH
=total Man. costs to account for
-ending work in process
=cost of goods Manufactured
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Man. Direct Material Used
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Beg. raw material inventory
+purchases
+freight-in
=material available for use
-ending raw material inventory
=raw material used
-indirect material used
=direct material used
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Man. COGS
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beg. finished goods inventory
+Costs of goods manufactured
=cost of goods available for sale
-ending finished goods inventory
=COGS
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Man. Income Statement
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Sale Revenue
-COGS
=gross profit
-operating expenses
=operating income
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Total Cost
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FC+VC
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Average Cost
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Total cost/# of units
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PredeterminedMOH rate
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total estimated MOH cost/total estimated amount of allocation base
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Allocating MOH to individual jobs
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POHR X amount of cost allocation activity used
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Cost per Equivalent Unit
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total costs to account for/total equivalent unit
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Total variable costs
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y=vx
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Total fixed cost
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y=f
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Mixed Costs
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y=vx+f
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Absorption Cost equation
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dl+dm+MOH+ fixed MOH
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Contribution Margin
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Sales Revenue-VC
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Contribution Margin Ratio
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contribution margin/sales revenue
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Break even Point
Break-Even Point in Dollars
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Fixed costs+operating income/CM%
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ACC 211: Final Study Guide