Module4Lecture4Notes - UGBA 10 Module 4 Lecture 4 Notes 4/2...

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Module 4 Lecture 4 Notes 4/2 Accounting and Finance Paper topic on Auditing Internal controls Corporate scandals—managers of firm got more money than entitled to Auditors check that a firm is not messing with their own books Managerial Accounting Overview of Terms Managerial Accounting o Concerns the question of costs o Costs/volume/profit relationships achieving ―break-even‖ Costs relevant and not relevant Accounting Are firms profitable? In business, give 30 days pay to employees Managerial accounting for internal, financial accounting for external Managerial Accounting More frequent report than financial o Financial report is quarterly Ex. Kaiser checks daily patient records, etc. Ex. Gap checks weekly o They don’t check daily because there may be small spikes, i.e. Monday’s sales may be depressed because it is right after Spring Break Measures o Old Navy division of Gap if sold is 10% more than last year, but because they opened 6 new stores Compare by stores Different size stores, so calculate sales per square foot o Airlines keep track of profit per person by miles traveled Revenue for revenue Focus on costs o If do not know costs to make something, will sell too cheap and create a loss Fixed Cost Doesn’t vary according to number of tickets sold Screen charge for silk screening is a one-time charge Variable cost 24 T-shirts cost more than 10 200 people at a fraternity for a slice of pizza versus 60 people Simple T-shirt Example UGBA t-shirt comes in 3 colors: green, gold, and blue, so $90 Variable cost $9 each Total cost = total variable cost + total fixed cost
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Module4Lecture4Notes - UGBA 10 Module 4 Lecture 4 Notes 4/2...

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