ACC212FinalReview.docx

6 Pages
234 Views
Unlock Document

Department
Accounting Business Administration
Course
ACC 212
Professor
Mario Perez
Semester
Spring

Description
CHAPTER 1: FINANCIAL VS. MANAGERIAL ACCOUNTING 1. External vs. Internal users  Financial Accounting: External users  Managerial Accounting: Internal users 2. Accounting rules  Financial Accounting: Info must be conformed with GAAP or IFRS  Managerial Accounting: Rules are NOT required 3. Level of detail  Financial Accounting: Deals with the company as a whole, contains very little detail  Management Accounting: Info is designed to address specific issues  much more detailed. 4. Timeliness  Financial Accounting: Statements are presented quarterly, annually  Managerial Accounting: Information is needed to made frequent decisions Statements need to always be ready 5. Orientation  Financial Accounting: Historical Info  Managerial Accounting: Both Historical and Future info Financial Accounting focuses on profitability, solvency (liability vs asset), and liquidity Managerial Accounting focuses on efficiency, productivity, quality CHAPTER 2 Cost Objective: An activity or item for which we desire to measure its cost  Activity: Provides a service  Cost of providing the service  Item: Sells product  Cost of buying or making the items Product vs. Period cost Product Cost: Cost of product, cost of inventory  Reported on the Balance Sheet until sold, then, it becomes Cost of Goods Sold on Income Statement Period Cost: All costs incurred by a company that are not considered product costs (Includes selling and administrative cost) (Ex: cost of employees in accounting, finance, marketing, and certain executives  Selling cost – the cost of locating customers, attracting customers, convincing customers to buy, and the cost of necessary paperwork to document and record sales (ex: salaries paid to the sales force, sales commissions, and advertising)  Administrative cost – all costs incurred by a company that are not product costs or selling costs. Includes the cost of accounting, finance, employee relations, and executive functions  The distinction between product cost and period cost is based on whether the cost in question benefits the process of getting product ready for sale (product cost), or the selling and administrative functions (period costs) Direct vs. Indirect cost Direct cost: A cost that is easily traceable to an individual cost object (Store manager salary) Indirect costs: A cost that supports more than one cost object (Common Cost) (Region manager salary) Retailer vs Manufacturer 1. How we determine product cost  Retailer: Purchase Price + Shipping + Taxes + Insurance  Manufacturer: DM + DL + MO 2. Balance Sheet (Inventory)  Retailer: 1 type of Inventory: Finished Goods  Manufacturer: 3 types of inventory: Raw Materials, WIP, Finished Goods 3. Income Statement (Cost of Goods Sold) CHAPTER 3 Cost Accounting: Determine how much it cost to make an item or job (cost object) Job order costing vs. Process costing Job Order Costing: Keep track of the cost of each individual item or job Process Costing: Do not keep track individually. Calculate the average cost per item or job Documents used by manufacturing company 1. Job Cost Sheet: Only applied to Job Order Costing  Keep track of the cost of each item or job 2. Purchase Requisition: Both Job Order and Process Costing  Prepared by the department that needs materials then sent to the purchasing department 3. Purchase Order: Both Job Order and Process Costing  Prepared by the Purchasing department and sent to vendor 4. Receiving Report: Both Job Order and Process Costing  Document the quantity that was received (Quantity received  Raw Materials Inventory) 5. Material Requisition: Both Job Order and Process Costing  Document the transfer of materials from raw materials to WIP Inventory 6. Labor Time Ticket: Only for Job Order Costing  Keep Track of employee hours by item or job CHAPTER 4 ABC: A more accurate way of allocating manufacturing overhead. Use more than 1 cost driver  More than 1 rate CHAPTER 5 Cost Behavior: Analyze how costs (expenses) react to different levels of activity (volume) 3 types of Cost Behavior: 1. Variable Costs  Remain the same per unit regardless of activity  As activity goes UP, total variable cost goes UP  Eg: hourly wages 2. Fixed Cost  Remains the same in total, regardless of activity  As activity goes UP, fixed cost per unit goes DOWN  Fixed costs remain the same in total within the relevant range  Eg: Rent 3. Mixed Cost  Both variable and fixed  Eg: Utilities (basic cost + variable), Salesman salary (fixed + commission) 4 Methods of splitting costs 1. Engineering approach Company hires an expert to help determine what is fixed and variable 2. Scatter graph Manually plot historical data into a graph to determine the fixed and variable cost 3. Regression analysis Use software to determine the fixed and variable  Most
More Less

Related notes for ACC 212

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit