Managerial Accounting Ch 1.

The purpose of managerial accounting is to aid in:

1) Determining costs of products and services

2) Comparing to actual planned events

Managerial accounting system.

Purpose is to assist managers in planning and control decisions

Financial Accounting system.

Structured and follows GAAP

____ is when a person commits fraud and feels a low risk of getting caught.

Opportunity

Its information is often available only after an audit is complete.

Financial Accounting

Its primary users are outside of the organization.

Financial Accounting

Its principles and practices are relatively flexible.

Managerial accounting

It contains mostly monetary information, and some nonmonetary information.

Managerial accounting

It focuses mainly on past results.

Financial

Determine whether to lend to a company.

Finacial

Determine what products to sell.

Mangerial

Determine whether to buy a company’s stock.

Financial

Evaluate a purchasing department’s performance.

Managerial

Estimate product costs foe a new line of shoes.

Managerial

Measure profitability of an individual store.

Managerial

Determine location and size for a new plant.

Mangerial

Prepare financial records according to GAAP.

Financial

_________ Costs are cost-effectively traced to a cost object.

Direct

______ Costs include selling expenses and general office personnel, advertising expenses, and depreciation of office equipment.

Period.

_____Costs for an airline include ground crew and maintenance crew wages.

Indirect

Prime costs = ….?

Direct material + Direct Labor

Wages of product assembly workers

Direct

Taxes on factory

Indirect

Machinery depreciation (straight - line)

Indirect

Factory building rent

Indirect

Wages of factory machine operators

Direct

Factory insurance used up

Indirect

Factory supervisor salary

Indirect

Human resources staff salaries

General and administrative

Salesperson commissions

Selling

Office headquarters rent

General and administrative

Office equipment insurance used up

General and administrative

Travel agent salaries

Selling

Advertising

Selling

Salary of chief executive officer

General and administrative expense

Depreciation on office equipment

General and administrative expense

Office building insurance used up

General and administrative

Uniforms provided for each factory worker

Factory overhead