ACCT 204 Chapter 2 Print

ACCT 204 Chapter 2 Print - Introduction and Chapter 2 Cost...

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Introduction and Chapter 2 Cost Concepts
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Managerial vs. Financial Accounting Who is the decision maker? Time focus? Where does decision maker obtain information? What types of “reports” are prepared by the accountant? What is the role of GAAP?
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Financial and Managerial Accounting: Seven Key Differences Financial Accounting Managerial Accounting 1. Users External persons who Managers who plan for make financial decisions and control an organization 2. Time focus Historical perspective Future emphasis 3. Verifiability Emphasis on Emphasis on versus relevance objectivity and verifiability relevance 4. Precision versus Emphasis on Emphasis on timeliness precision timeliness 5. Subject Primary focus is on Focus on companywide reports segment reports 6. Rules Must follow GAAP / IFRS Not bound by GAAP / IFRS and prescribed formats or any prescribed format 7. Requirement Mandatory for Not external reports Mandatory
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Purpose of Managerial Accounting Understand effects of cost behavior on decision making Includes relevant costing and capital budgeting Determine what it “costs” to make something or do something Help control the operations of the entity Primary focus is on budgeting Cost behavior is an element common to
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Types of “Internal” Accountants Controller Keeps the books This includes determining what it cost to make things CPA and/or CMA Treasurer Manage the company’s financing activities CPA and/or CMA Internal Auditors
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Work of Management Planning Controlling Decision Making
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Classification of Manufacturing Costs Direct Materials Direct Labor Manufacturing Overhead
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Nonmanufacturing Costs Selling Costs: Expense incurred in the marketing and distribution product. Administrative Costs: Administrative costs are all executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing, marketing, or selling.
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Product Costs Direct Materials Direct Labor Manufacturing Overhead Period Costs
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This note was uploaded on 11/30/2011 for the course ACCT 2104 taught by Professor Davidemerson during the Spring '11 term at Old Dominion.

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ACCT 204 Chapter 2 Print - Introduction and Chapter 2 Cost...

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