ACCT 2102: Test 1
24 Cards in this Set
| Front | Back |
|---|---|
|
financial vs managerial
|
1. manage: internal, whatever management needs, no rules, future, part of company, everyone
2. finance: external, financial statements, GAAP, historical for company as whole, accountants
|
|
ethics
|
competence, confidentiality, integrity, and credibility
|
|
sustainability
|
meeting the needs of the present without sacrificing the needs of the future
|
|
ppl care about sustainability
|
triple bottom line:
-look at profit
-how decisions affect other people
-taking care of the planet
|
|
service companies
|
no tangible project they are offering, no inventory
|
|
value chain
|
expense is always a cost but a cost is not always an expense
|
|
value chain process
|
1. research: innovation, thinking about improvement
2. design: coming up with plan/recipe
3. production/purchase: NOT service company. PRODUCT.
4. marketing: how you sell it
5. distribution: deliver
6. customer service
|
|
period cost
|
not ever in inventory, expensed in period which they are incurred.
-never placed on balance sheet as asset. expensed on income statement as op expenses
|
|
cost object
|
thing we want to assign cost to.
-direct product: easy & convenient to trace to object.
|
|
3 types of product cost
|
1. DM
2. DL
3. MOH - indirect
|
|
NEED COST OBJECT TO DETERMINE DIRECT OR INDIRECT
SHIP IN - PERIOD
SHIP OUT - PRODUCT
Income statement for merchandiser and manufacturer
|
IDENTICAL
sales
-COGS
= GP
-op exp
= NI
|
|
cost assigned to unites completed
|
COGM
|
|
COGS schedule does NOT include
|
period cost. only op income includes period cost.
|
|
job costing
|
unique, customizable products in small batches
-manufactures but also some service companies.
|
|
POHR
|
budgeted MOH / budgeted allocation base
|
|
MOH during year
|
allocate MOH to each job by:
POHR * actual activity level of allocation for job
|
|
ABC
|
places greater focus on identifying the activity and related cost drivers that cause a company to generate MOH.
-better job of product costing than any other cost system
|
|
cost of adopting ABC
|
-low when company has accounting and info tech expertise
-understanding cost is extremely important in competitive markets and in company with high risk of cost distortion
|
|
process costing
|
large batches of identical units of product. inefficient to trace product cost to individual jobs.
RM, WIP, FG, COGS
|
|
GOAL OF JOB AND PROCESS
|
determine the cost of a unit of product
|
|
equiv units
|
used in process costing to enable fair assignment of costs to a completed unit and to a partially completed unity
-REPRESENT TOTAL AMOUNT OF UNITS THAT COULD HAVE BEEN COMPLETED GIVEN PRODUCT COSTS
|
|
fifo
|
more accurate when product cost part drastically from period to period
|
|
weighted average
|
combines physical flow and cost of units beginning inv and of units started during the period
|
|
beginning % complete is irrelevant for current period calculations.
|
relevant for prior period calc
|
Study Guide: Terms and Definitions