Final Study Guide

Final Study Guide - Managerial vs. Financial A. Financial...

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Managerial vs. Financial   A. Financial 1. Managerial   Primary focus A. External Users 1. Internal Users   ‘Level’ of reports A. Highly aggregated 1. Generally Detailed   Rules A. GAAP 1. Anything Goes   Information involved A. Finances only; only with past and what they can prove 1. Not just dealing with money, outcast looking   A. 3 Management Functions 1. Planning i. Goal-setting: may be short or long term 2. Directing and motivating i. Implementing the plan ii. Devising incentives 3. Controlling i. Keeping an eye on things B. Manufacturing (Product) Costs 1. Direct Materials: clearly identifiable component of final product 2. Direct Labor: work of employees physically and directly associated with  final product 3. Manufacturing Overhead: indirectly associated with the final product i. DM + DL + MOH = Total manufacturing costs ii. Indirect materials iii. Indirect labor iv. Factory-related costs v. Equipment and support costs C. Non-manufacturing (Period) Costs 1. Costs not directly or indirectly supporting production, such as: i. Advertising ii. Sales commissions
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iii. “Home Office” costs iv. Income taxes v. Bad debt expense D. 3 Inventory Classifications     1. Raw Materials (RM) 2. Work in Process (WIP) 3. Finished Goods (FG) E. CGM 1. Beginning WIP 2. + Current period manufacturing costs     3. Total costs to account for 4. - Ending WIP     5. Cost of goods manufactured F. CGS   II. Chapter 2 A. Job Order Costing 1. Distinguishable products 2. Keeps track of each job/unit separately 3. Direct costs: traced i. Direct Materials: requisitions, invoices ii. Direct Labor: time records, payroll 4. MOH: pooled, then allocated i. Indirect materials and labor ii. Repairs to machinery iii. Factory utilities iv. Property taxes v. Bonuses for factory supervisors B. Process Order Costing 1. Constant flow of goods 2. Can't tell apart; homogenous 3. Relies on broad averages   III. Chapter 4 A. Activity Based Costing 1. Products may seem basically the same but be very different in cost  terms
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2. Overhead may have no relation to DL or machine hours 3. Overhead is significant and not connected to a single driver B. Value-added vs. Non-value added 1. Value added i. Increases the worth of a good or service ii. Customers willing to pay for 2. Non-value added i. Increases the cost or time spent, but does not increase market  value ii. Can be removed and customers will not miss iii. Obvious examples iv. Less obvious examples C. Activity Levels 1. Unit level costs 2. Batch level costs 3. Product level costs 4. Facility level costs D. Just in Time 1. Basic definition: having just the right amount of RM and FG available just 
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This note was uploaded on 04/25/2008 for the course C 002 taught by Professor Staff during the Fall '04 term at NYU.

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Final Study Guide - Managerial vs. Financial A. Financial...

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