MGT 5 Chapter Notes - Chapter 1: Internal Control, Income Statement, Financial Statement

• School: UCSD
• Department: Rady School of Management
• Course: MGT 5
• Professor: Wade Lindenberger

Document Summary

Managerial accounting: provides economic and financial information for managers and other internal users. Compared to financial accounting, managerial is focused on the internal part of the firm, while financial accounting is more focused on the external activities of the firm. Direct materials: raw materials that can be physically and directly associated with the finished product during the manufacturing process. Indirect materials: physically do not become part of the finished product, impractical to trace to the finished product because their physical association with the finished product is too small in terms of cost. Direct labor: the work of factory workers that can be physically and directly associated with converting raw materials into finished goods. Indirect labor: the work of employees that has no physical association with the finished product or for which it is impractical to trace costs to the goods produced. Manufacturing overhead: costs that are indirectly associated with the manufacture o the finished product.