Take_Aways_CH_1_CH_2 - DM used DL and M O/H • At the end...

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ACC 202 Spring 2009 Take-aways from Chapter 1-2 Managers of organizations use accounting data to make decisions that will improve the quality of the product or service and achieve organization-wide goals. Management accountants have developed terminology, conventions, and analytical tools to measure the cost of products and services and to measure performance. There is no GAAP for managerial accounting, so internal managers and accountants can adapt conventions and analytical tools to meet their needs. The “cost” of a product depends on the particular problem the manager is addressing; that is, completing external financial reports, or predicting product costs, or assigning costs to different product lines. The cost of a manufactured product under “full absorption costing” is the sum of
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Unformatted text preview: DM used, DL, and M O/H. • At the end of the period, there may be three types of inventory remaining: DM, W/P, F/G • COGS is matched up with Sales for a period and presented on the Income Statement. It is the COG Manufactured that period +/- the change in F/G inventory levels. • COG Manufactured during that period is the sum of manufacturing costs (DM used, DL, M O/H) +/- the change in Work in Process inventory. • The DM Used during the period is DM purchased +/- the change in DM inventory. • Costs that are more closed connected to a period of time, rather than the product, (such as general and administrative and selling expenses) are expensed in the period in which they are incurred....
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This note was uploaded on 03/30/2009 for the course ACCT 202 taught by Professor Sollenberger during the Spring '08 term at Michigan State University.

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