Managerial Acc P-3

What are manager’s 3 main responsibilities

planning, controlling, decision making

What are the key characteristics of managerial acc?

serves internal managers, doesn’t have to follow GAAP, reports are segmented and non-mandatory, focuses on the future and relevance

What are the key characteristics of financial acc?

serves external parties, has to follow GAAP, reports are mandatory and company wide, focuses on the past, and objectivity and verifiability

4 standards of the IMA ethical professional practice

credibility, confidentiality, professional competence, integrity

What is a cost object

an item you are trying to find a cost for

What are the 2 forms of cost objects

direct (easily traced), indirect (hard to trace)

what are the 3 manufacturing product costs

direct materials, direct labor, manufacturing overhead

When are the 3 manufacturing product costs expensed

when the product is finished

when are period costs expensed

as they are incurred

what are period costs

costs that do not effect the production of a product

what are conversion costs

the total expenses to turn raw aterials into a finsihed good, direct materials + MOH

what are prime costs

the total of all DIRECT costs to make a product, direct labor + direct materials

what is job order costing

a cost system that is used when there are many different products sold

what are the 3 documents used during the manufactuing of a product

job cost sheet, bill of materials, material requistion form

what is the job cost sheet

records the dm, dl, MOH costs applied for a specific job

what is the bill of materials

lists the quantity of each type of DM meeded to complete a unit of product

what is the material requistion form

specifies the type and quantity of materials to be transferred from storeroom and identifies the job to be charged

How are overhead costs assigned to jobs in production

via redetermined overhead rate, estimated total overhead costs / estimated total allocation base

4 steps to applying overheads PLANTWIDE

estimated OH cost / estimated allocation base = predetermined OH rate x actual allocation base

4 steps to apply overhead DEPARTMENT

estimated OH cost / estimated allocation base = predetermined OH rate x actual allocation base (PER DEPARTMENT)

Which steps for applying overhead are BOY

estimating OH costs, select allocation base, estimate total allocation, and calculating the predetermined overhead rate

Calculate Predetermined overhead rate

estmimated OH cost / estimated allocation base

Which steps for applying overhead are throughout the year

applying the predetermined rate to active hours

How do you calculate the total/manufacturing cost of a job

DM+DL+MOH

How do you calculate the manufacturing/unit cost of a job

total job cost divided by total units produced

what are the 3 manufacturer inventory accounts

Raw material, WIP, and finished goods

What are the flow of costs for the 3 inventory accounts

$ for raw materials, DM+DL+MOH for WIP, total product cost

What is COGS

its an expense account, finished goods is an asset and will then move to COGS when sold

How to calculate DM used

BI Raw Material + Purchases - EI Raw Material

Calculate COGM used

Total manufactuing cost (DM+DL+MOH) + Beginning WIP - Ending WIP

Calculate COGS

Beginning Finished Goods + COGM - ENding Finished goods

overapplied OH

applied OH > actual OH

Underapplied OH

actual OH > applied OH

What is applied OH

the predetermined rate x actual hours worked

what account is adjusted for under/over applied OH and how?

COGS, increase/decrease