managerial accounting

Board of directors

Elected by the stockholders and responsible for developing the strategic goals of a corporation.

Certified management accountant (CMA)

Professional accountant who specializes in accounting and financial management knowledge.

Chartered global management accountant (CGMA)

Professional accountant with advanced knowledge in finance, operation, strategy, and management

Chief executive officer

Officer of a company that has ultimate responsibility for implementing the company’s short and long term plans.

Controlling

Monitoring operations and keeping company on track

Conversion cost

The cost to convert direct materials into finished goods. Direct labor plus manufacturing overhead.

Cost object

Anything for which managers want a separate measurement of cost.

Cost of goods manufactured

The manufacturing costs of the goods that finished the production process in a given accounting period.

Data analytics

The process of examining data, identifying trends, and drawing conclusions

Data visualization

The presentation of data, trends, and conclusions in graphical format

Direct cost

Cost that can be easily and cost effectively traced to a cost object

Direct labor

The cost of wages and salaries of employees who convert raw materials into finished products

Direct material

Cost of raw materials that are converted into finished products and are easily traced to the product

Directing

Running all day to day operations of a business

Enterprise resource planning

Software system that can integrate all of the company’s functions, departments, and data into single system

Financial accounting

Field of accounting that focuses on providing information for external decision makers

Finished good inventory

Completed goods that have not yet been sold

Indirect cost

Cost that cannot be easily or cost effectively traced to a cost object

Indirect labor

Cost of wages and salaries in the factory for persons not directly producing the product and cannot be conveniently traced directly to specific finished products or are not large enough to justify tracing to specific product

Indirect material

The cost of raw materials that cannot be conveniently traced directly to specific finished products or are not large enough to justify tracing to the specific product

Just-in-Time costing

Costing system that starts with the output completed and then assigns manufacturing costs to units sold and to inventories.

Line positions

Job that directly involved in providing goods or services to customers

Managerial accounting

Field of accounting that focuses on providing information for internal decision makers.

Manufacturing companies

Company that used labor, equipment, supplies, and facilities to convert raw materials into finished products

Manufacturing overhead

Manufacturing cost that cannot be easily and cost-effectively traced to a cost object. Includes all manufacturing costs except direct materials and direct labor.

Merchandising company

A company that resells products previously bought from suppliers

Operational planning

Focuses on short term actions dealing with company’s day to day operations

Organizational chart

Shows the relationship between departments and divisions and managers responsible for each section.

Period cost

Operating cost that is expensed in the accounting period in which it is incurred

Planning

Choosing goals and deciding how to achieve them

Prime cost

Direct costs of the manufacturing process. Direct materials plus direct labor

Product cost

Cost of purchasing or making a product. The cost is first recorded first as an asset (inventory) and then expensed (cost of goods sold) when the product is sold.

Raw material inventory

Materials converted through the manufacturing process into finished product

Service company

A company that sells services- time, skills, and knowledge-instead of products

Staff position

Job that provides support for line positions

Strategic planning

Involves developing long-term strategies to achieve a company’s goals

Total quality management

Philosophy designed to integrate all organizational areas in order to provide customers with superior products and services, while meeting organizational goals throughout the value chains

Triple bottom line

Evaluating a company’s performance by its economic (profits), social, and environmental impact.

Value chain

Cost that increase or decrease in total in direct proportion to increases or decreases in the volume of activity

Work in process inventory

Goods that have been started in the manufacturing process but are not yet complete