Chapter 1

Chapter 1 - Chapter 1 Monday, January 10, 2011 9:22 AM...

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Monday, January 10, 2011 9:22 AM -Difference btwn Financial and Managerial Accounting (external) (internal) Page 5 for table of differences 4 Categories of Ethics (appendix B): Competence Confidentiality Integrity Credibility 3 Management Functions Planning Directing + Motivating Controlling 3 Types of Businesses Service Firms- does not have much actual "inventory" Merchandising Firms- ex. department store Manufacturing Firms- most complex 3 Manufacturing Costs (use car as example) Direct Materials: form integral part of finished product (ex. tires, engine, glass, etc) Direct Labor: labor expended upon direct materials (ex. people on assembly line) Factory Overhead: all manufacturing costs other than direct materials and direct labor (everything else in manufacturing facility) o DM + DL = prime costs o DL + FO = conversion costs Ex. PC = $4,700 CC = $2,200 DM = 3X FP So what is DM? DL? FO? DM= $3750, DL = $950, FO = $1250
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Chapter 1 - Chapter 1 Monday, January 10, 2011 9:22 AM...

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