ACC 310 Exam 3 - Managerial Accounting

what is managerial accounting?

the practice of tracking, analyzing, and reporting financial and operational data to an organization’s internal leaders

primary user are external
controlled by GAAP
reports created periodically (ex:quarterly, annually)
focuses on the whole organization

financial accounting

focuses more on the future
uses many estimates and projections
used in managers’ planning decisions
can include non-monetary measures
reports can be produced on-demand

Managerial Accounting

what is costing?

quantifying and allocating costs

product costs

direct materials, direct labor, manufacturing overhead (indirect)
tied directly to making or acquiring goods

period costs

SG&A
period costs are non-manufacturing expenses

product costs are _____

capitalized and then later expensed as COGS

period costs are ____

expensed immediately

Manufacturing process:

1. Raw (direct) materials

2. Work in Process (WIP)

3. Finished Goods (FG)

*overhead

difference between direct and indirect costs

direct costs can be traced directly to a specific product, project, or cost object, while indirect costs (often called overhead) support overall operations and cannot be easily tied to a single product or project

Total manufacturing costs (TMC) =

total inputs to WIP during the period

direct materials + direct labor + applied overhead

COGM =

total outputs from WIP - inputs to FG — i.e. cost of products that are “finished” during the period

TMC + Beg WIP - End WIP

Cost of goods available for sale =

total cost of FG available to be sold

Beg FG + COGM

Cost of Goods Sold =

total costs of inventory sold during the period (output from FG)

Beg FG + COGM - End FG

COGM Schedule

Raw materials:

BEG RM

+RM purchased

Total RM available

-END RM

RM used in production

Direct Labor:

Applied manufacturing overhead

Total manufacturing costs

+BEG WIP

-END WIP

= COGM