Managerial Accounting ACCT 204 CH 1
Quantification of the resources and expenditures that will be required during a given period of time to achieve a plan.
Process of monitoring actual results to see whether the objectives set in the planning state are being met.
Sum of direct labor and manufacturing overhead; total cost incurred to convert direct materials into a finished product.
Any item for which one wants to determine cost.
Costs that differ between decision alternatives.
Costs that can be directly and conveniently traced to a specific cost object
Directing/Leading p. 6
One of the key functions of management that involves all of the actions required to put a plan into action.
Direct Labor p. 17
Cost of labor that can be directly and conveniently traced to the product
Direct Materials p. 17
Major material inputs that can be directly and conveniently traced to the product
Ethics p. 10
Standards of conduct for judging right from wrong, honest from dishonest, and fair from unfair.
Financial Accounting p. 5
Accounting area focused on providing financial information to external users such as investors, creditors, and regulators.
Fixed Costs p. 16
Costs that remain the same, in total, regardless of activity level.
General and Administrative Expenses p. 18
Costs incurred in running the overall organization.
Indirect Costs p. 14
Costs that cannot b traced to a specific cost object or aren’t worth the effort to trace.
Inventoriable Costs p. 18
Costs that are counted as inventory on the balance sheet until the product is sold; another term for product costs.
Irrelevant Cost p. 19
Cost that is not relevant because it will not change depending on a manager’s decision.
Managerial Accounting p. 5
Accounting area focused on providing information to assist business owner and managers in making business decisions.
Manufacturing Costs p. 17
Costs incurred to produce a physical product; generally classified as direct materials, direct labor, or manufacturing overhead.
Manufacturing Firms p. 8
Companies that purchase raw materials and use them to make a finished product to sell to wholesalers, retailers, or customers.
Manufacturing Overhead p. 18
All costs other than direct materials and direct labor that are incurred to manufacture a physical product.
Marketing or Selling Expenses p. 18
Costs incurred to market and sell a product or service to a customer.
Merchandising Companies p. 9
Companies that purchase goods (merchandise) from suppliers and sell them to other businesses or consumers.
Non-manufacturing Costs p. 18
Costs associated with running a business or selling a product as opposed to manufacturing a product; generally classified as selling, general and administrative expenses.
Opportunity Cost p. 13
Forgone benefit or lost opportunity of choosing one alternative instead of another
Out-of-pocket Cost p. 13
Costs that involve an outlay of cash.
Period Costs p. 19
Costs that are related to non-manufacturing activities and are expensed as soon as they are incurred.
Planning/Organizing p. 6
Future-oriented aspect of the management process that involves setting long-term goals and objectives and short-term tactics necessary to achieve those goals.
Prime Costs p. 18
Sum of direct materials and direct labor; represent the costs that can be directly traced to the product.
Product Costs p. 18
Costs that are assigned to the product as it is being manufactured.
Relevant cost p. 19
A cost that occurs in the future and differs between decision alternatives.
Sarbanes-Oxley (SOX) Act of 2002 p. 10
Act passed by Congress to restore investor confidence in and improve the quality of financial reporting by publicly traded companies in the United States.
Service Companies p. 9
Companies that provide services to other businesses or consumers.
Sunk Costs p. 20
Costs incurred in the past that are not relevant to future decisions.
Variable Costs p. 16
Costs that change, in total , in direct proportion to changes in activity levels.