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Managerial Accounting
Provides financial and nonfinancial information to an organization's managers.
Purpose of Managerial Accounting
Determining costs of products/services, planning future activities, comparing actual results to planned results.
Planning
The process of setting goals and making plans to achieve them.
Control
The process of monitoring planning decisions and evaluating an organization's activities and employees.
Internal Control System
A way to monitor and control business activities.
Ethics
Beliefs that distinguish right from wrong.
Institute Of Management Accountants (IMA)
Issued a code of ethics to help accountants solve ethical dilemmas.
Fixed Costs
Do not change with changes in the volume of activity.
Variable Costs
Change in proportion to change in the volume of activity.
Cost Object
A product, process, department, or customer to which costs are assigned.
Direct Costs
Traceable to a single object.
Indirect Costs
Cannot be easily and cost-beneficially traced to a single cost object.
Product Costs
Those costs necessary to create a product.
Period Costs
Non Production costs usually linked to time periods.
Direct Materials
Tangible components of a finished product.
Direct Labor
Employees who physically convert materials to finished products.
Factory Overhead
All manufacturing costs that are not direct materials or direct labor.
Prime Costs
Costs directly associated with the manufacture of finished goods.
Conversion Costs
Costs incurred in the process of converting raw materials to finished goods.
Finished Goods Inventory
Consists of completed products ready for sale.
Cost of Goods Manufactured
The cost of finished products.
Total Manufacturing Cost
Direct materials used + Direct labor used + Factory overhead used.
Lean Business Model
A principle whose goal is to eliminate waste while satisfying customers and providing a positive return.
Continuous Improvement
Rejects 'good enough' and continually experiments with new business practices.
Total Quality Management
Focused on quality improvement of business activities.
Just-In-Time Manufacturing
A system that acquires inventory and produces only when needed.
Corporate Social Responsibility (CSR)
Integrates social and environmental concerns in business operations.
Triple Bottom Line
Focuses on financial (profits), social (people), and environmental (planet) measures.
Sustainability Accounting Standards Board (SASB)
Develops reporting standards for businesses' sustainability activities.
