Warren%20SMChap16_01_.pdf - 1 CHAPTER 16(FIN MAN CHAPTER...

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Unformatted text preview: 1 CHAPTER 16 (FIN MAN); CHAPTER 1 (MAN) MANAGERIAL ACCOUNTING CONCEPTS AND PRINCIPLES EYE OPENERS 1. Financial accounting and managerial ac- counting are different in several ways. Financial accounting information is reported in statements that are useful to persons or groups outside of a company. These state- ments objectively report the results of past operations at fixed periods and the financial condition of the business under generally accepted accounting principles. Managerial accounting information uses both subjective and objective information to meet the spe- cific needs of management. The information can be reported periodically or as needed by management and can be reported for the entire entity or for segments of the organiza- tion. 2. a. A line department is directly involved in the basic objectives of the organization, while a staff department provides ser- vice, assistance, or advice to line de- partments or other staff departments. b. (1) Sales Department (2) Personnel Department 3. a. The role of the controller is to provide financial and accounting advice and as- sistance to management. b. The controller has a staff responsibility. 4. The five basic phases of the management process are planning, directing, controlling, improving, and decision making. Planning is the process of establishing financial expec- tations for the future through the use of planning documents. Directing is the proc- ess of assigning responsibility and using data to guide the operations of the firm. Controlling is using information as feedback to correct operations. Improving is using data to monitor and guide process im- provement. Decision making is involved with all of the previous four processes of man- agement. 5. The strategic plan is used to guide the use of business resources over long-range hori- zons. 6. The process of running day-to-day opera- tions, given assigned responsibilities, is di- recting. 7. Controlling 8. Management by exception involves monitor- ing results of implemented plans and com- paring the expected results with actual results. The feedback allows management to isolate significant variances for further investigation and possible remedial action. 9. Cost 10. Memory chips would be considered a direct materials cost and, hence, would be a direct cost associated with each microcomputer. 11. Direct materials cost, direct labor cost, and factory overhead cost 12. Direct materials cost 13. If the cost of wages paid to employees is not a significant portion of the total product cost, the wages cost would be classified as part of factory overhead cost. 14. Prime costs are the combination of direct materials and direct labor costs, while con- version costs are the combination of direct labor costs and factory overhead costs....
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This note was uploaded on 07/17/2011 for the course ACCT 102 taught by Professor Martinez during the Summer '11 term at Rio Hondo College.

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Warren%20SMChap16_01_.pdf - 1 CHAPTER 16(FIN MAN CHAPTER...

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