Chapter _1 - Lecture Notes

Chapter _1 - Lecture Notes - ACC 208: Managerial Accounting...

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ACC 208: Managerial Accounting for Decision Making Lecture Notes 1. What are the three major activities of managers: a. Planning – identify alternatives and select the best alternative; b. – directing and motivating people and overseeing day to day activities; and c. Controlling – using feedback to make sure all departments of company are on the same page. 2. What is the difference between financial accounting and managerial accounting: Characteristics Financial Accounting Managerial Accounting End Users of Data Reports to Shareholders, Directors, Lenders, Regulators & other outside Reports to those inside company for planning, directing & motivating, controlling and performance evaluation Emphasis of Reports Financial consequences of past performance – summary of what has happened Decisions affecting future (i.e. planning) – requires use of estimates Relevance of Data Data should be objective & verifiable Data must be relevant (i.e. appropriate for the problem at hand ) and may require use of estimates & customer feedback Emphasizes Precision Timeliness Objective of Reports Summary data concerning company as a whole Detailed reports regarding departments, products, GAAP Must follow GAAP GAAP not required Other External financial reports requires use of historical data Managerial accounting reports may require use current cost data 3. Manufacturing Costs (a.k.a. inventoriable costs): a. Direct Materials – are those materials that become an integral part of a finished product and can be conveniently traced into it (i.e. tires on a car); Note: Indirect materials are small material items (i.e. glue) which are too costly and inconvenient to trace such small costs to individual units. 1
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ACC 208: Managerial Accounting for Decision Making Lecture Notes b. Direct Labor (i.e. touch labor) – consists of labor costs that can be easily traced to individual units of product (i.e. wages of assembly line worker); Note: Indirect labor costs are costs that can’t be traced to c. Manufacturing Overhead - includes all manufacturing costs except direct labor and direct materials (i.e. indirect labor, indirect materials, factory rent, factory utilities, and depreciation on factory equipment and facilities). d.
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This note was uploaded on 06/05/2010 for the course ACC Acc208 taught by Professor Acc208 during the Fall '09 term at Cal Poly Pomona.

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Chapter _1 - Lecture Notes - ACC 208: Managerial Accounting...

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