Accounting Study Guide 1 Movahed
Accounting Study Guide 1 Movahed ACCT2521
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This 3 page Study Guide was uploaded by Bailey Lambert on Wednesday February 3, 2016. The Study Guide belongs to ACCT2521 at East Carolina University taught by Azita Movahed in Spring 2016. Since its upload, it has received 143 views. For similar materials see Managerial Accounting in Accounting at East Carolina University.
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Date Created: 02/03/16
Managerial Accounting-Exam #1 Study guide Date: 02/04/2016 125 points Chapter 1 Differences between managerial and financial accounting o Who is your audience? Managerial = internal Managers & executives. Financial = outsiders Stockholders, creditors, vendors, etc. o What is the purpose of the information? Managerial = help managers plan, direct, and control and make business decisions Financial = to help external users make decisions about the company as to whether to lend, invest, etc. o What the primary accounting product? Managerial = internal document, any really, that is deemed useful to the management. Financial = Financial Statements. o What is included in the product? Managerial = Management decides what is important and the cost of producing the internal reports has be less than the benefit derived from the reports in order for it to be beneficial. Financial = Determined by GAAP. o What is the underlying basis of the information? Managerial = Internal and external transactions that help provide information to focus on the future of the company. Financial = Historical transactions to report on what did happen for external users. o What information must be emphasized? Managerial = Data must be relevant…effected by the decision you are making for the future Financial = Data must be reliable and objective… verifiable. o What business “unit” is the report about? Managerial = Segments of the company…a store, a region, a department, a division. Financial = The company as a whole. o How often are the reports prepared? Managerial = Based on management needs. Financial = Quarterly and annually; based on GAAP o Does the information need to be verified? Managerial = No…internal audit may help and examine but not required. Financial = External auditors must verify and express an opinion on the financial statements before they can be “published”. o Is the information provided by the reports required by an outside/government agency? Managerial = No required. Financial = SECU requires publicly traded companies to issue quarterly and annual financial statements that follow GAAP and have been verified by external auditors. Manager’s duties Planning, directing and controlling Chapter 2 Different kind of Inventories for Manufacturing companies Raw materials, work in process and finished goods Value chain R&D, design, production or purchases, marketing, distribution and customer service Inventoriable product Cost for internal and external reporting FASB only allows Inventoriable product cost they only include the costs incurred during the production or purchases. Calculation of inventoriable cost for Merchandising and manufacturing companies Add DM, DL, and MOH. Recognition of Direct and indirect costs Direct costs are easily traceable, and indirect are things such as taxes or utilities, etc. Calculation of Cost of Goods Manufactured & Cost of Goods Sold for both all companies Calculation of Direct Material used Beg Rm +Purchases= Goods Available Ending Inv. Calculation of Gross profit RevenueCOGS Recognizing different kind of costs (Fixed, Variable; controllable; uncontrollable; etc.) Fixed Unchanging; Variable changes on product; Controllable MGMT can change (ex. Marketing); Uncontrollable Previous decision and can’t be changed. Calculating Avg cost; Prime cost; conversion costs Average Cost= total cost/units Prime Costs: DL+DM Conversion= DL+MOH Chapter 3 Job and process costing Finding how much each job can cost and allocating money for it. Determining and calculation of job’s cost PMOHRate Estimated Cost/Estimated hours. PMOH Rate*Actual Hours Flow of inventory RM WIP FG Allocating MOH to a job (know the whole calculation) PMOHRate Estimated Cost/Estimated hours. PMOH Rate*Actual Hours Using job’s cost to make business Decisions Determining what costs are associated with what Dealing with NonManufacturing costs Would just close out accounts as “operating expenses”, How to deal with Under or Overallocated MOH Under: Debit COGS; Credit MOH Over: Debit MOH; Credit COGS Journal entries for different part of cost calculation and adjusting MOH (all the J/E that we discussed in the class). Look for examples on MAL Calculation of Gross profit (after closing the MOH and adjusting COGS) Don’t worry about CostPlus pricing
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