Week 6 Notes
Popular in Basic Accounting Skills
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This 8 page Class Notes was uploaded by Natasha Harvey on Friday February 20, 2015. The Class Notes belongs to BUS-A100 at Indiana University taught by Vivian Winston in Spring2015. Since its upload, it has received 80 views. For similar materials see Basic Accounting Skills in Business at Indiana University.
Reviews for Week 6 Notes
The content was detailed, clear, and very well organized. Will definitely be coming back to Natasha for help in class!
-Ms. Javonte Haag
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Date Created: 02/20/15
21915 02192015 Companies have a choice of how to be competitive Product differentiation Producing a key product that is different in one or more key dimensions from the competitors product Pricebased competition Competing on price as opposed to product qualities Financial Accounting 0 Primarily external Governed by GAAP or IFRS o Primarily historical 0 Mostly quanti ed information for nancial statements Managerial Accounting 0 Primarily internal Governed by management s needs Primarily futureoriented Both quanti ed and non nancial information Cost of inventory for a manufacturing rm DM DL MOH Product Costs DM Direct materials DL Direct abor MOH Manufacturing overhead 0 Indirect Materials 0 Indirect Labor 0 All other manufacturing costs Cost ow of inventory through a manufacturing rm Raw materials Work in pro Types of Product Costing Job Order Costing 0 Costs are accumulated by jobs 0 Used when the product being produced is speci c as when there are batches of products 0 Process Costind 0 Costs are averaged over all units 0 Used in the manufacture of uniform or homogeneous products 0 Similarities between quotA 0 Purpose of both is to determine the cost per unit 0 Both systems use DM DL and MOH 0 Both systems have the same cost ow raw materials work in process nished goods 0 Differences between Aquot 0 Job Order Costing Costs are accumulated by batch orjob 0 Process Costing Costs are accumulated by department Costs Behaviors Fixed Costs 0 Costs that stay the same in total regardless of the volume produced 0 Change per unit if the volume changes 0 Fixed manufacturing overhead xed selling and admin costs 0 Variable Costs 0 Costs that vary in direct relationship with the volume produced 0 Stay the same per unit produced 0 Direct materials direct labor variable manufacturing overhead variable selling and admin costs Contribution Margin Sales Variable costs Contribution margin Fixed costs Pro t Breakeven Point Level of sales at which total revenue total costs
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