Managerial Accounting - Chapter 1 Vocabulary

Flashcards covering key vocabulary and concepts from Chapter 1 of Managerial Accounting.

Planning

To maximize revenues, profits, and business value

Directing

The day-to-day management functions of a business, including coordinating activities, implementing objectives, and motivating employees.

Controlling

Assessing how the plan worked out and determining if adjustments are needed.

Direct Materials

Materials directly used in producing a product and can be directly traced to it.

Indirect Materials

Materials that are either not part of the finished product or are impractical to trace directly to the product.

Direct Labor

Labor directly associated with the production of a product.

Indirect Labor

Labor that is either not directly involved in the production of a product or is impractical to trace to the product.

Manufacturing Overhead

Costs associated with manufacturing a product that are not direct materials or direct labor.

Product Costs

Costs directly related to producing a product, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Non-manufacturing costs, including selling and administrative expenses, that are expensed as incurred.

Raw Materials

Materials that have not yet been used in production.

Work in Process

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

Finished Goods

Completed goods that are ready to be sold.

Just-in-Time Inventory

A system where products are manufactured just before a sale is about to be made to minimize inventory costs.

Total Quality Management (TQM)

A broad system aimed at increasing the overall quality of a production or service entity.

Constraint (Bottleneck)

Any point in the value chain that limits a company's potential profitability.

Enterprise Resource Planning (ERP)

A software system that integrates all major operations of a company, from accounting to material ordering and sales processing.

Activity-Based Costing (ABC)

Allocating overhead costs based on how a product uses specific activities.

Balanced Scorecard

A holistic approach to evaluating a company's operations using both financial and non-financial measures.

Institute of Managerial Accountants (IMA)

An organization that provides guidance and support for managerial accountants, including ethical standards.

Triple Bottom Line

A business approach focused on profit, people, and planet to ensure sustainable and responsible business practices.