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ACCT 285
Accounting
20
Accounting
Undergraduate 1
12/12/2016

Additional Accounting Flashcards

 


 

Cards

Term
Managerial Accounting
Definition
field of accounting that provides economic and financial information for managers and other internal users for planning, controlling, and decision making purposes.
Term
Manufacturing Costs (Product Costs)
Definition
Direct materials: materials that can be conveniently traced to a product (wood in a table

Direct Labor: Labor costs that can be physically and conveniently traced to a product (assembly line workers in a plant)

Manufacturing Overhead: All costs of manufacturing a product other than direct materials and labor (factory utilities, indirect labor and materials)
Term
Non-Manufacturing Costs (Period Costs)
Definition
Selling Costs: All costs necessary to secure customer orders and get the finished product or service to their customer. (Sales commission, advertising, depreciation of goods)

Administrative Costs:All costs associated with the general management of the company as a whole (executive compensation, secretary salaries, depreciation of office building)
Term
Variable Cost
Definition
In total: Total variable cost increase and decrease in proportion to changes in the activity level

Per Unit: remains constant
Term
Fixed Cost
Definition
In Total: Total fixed cost is not affected by changes in the activity level within the relevant range

Per Unit: decreases as the activity level rises and increases as the activity level falls
Term
Mixed Cost
Definition
Mixed Cost = Fixed Cost + (Variable Cost X Level of Activity)
Term
Contribution Margin
Definition
CM = Sales Revenue - Variable Expenses

(first used to cover fixed expenses)
Term
Contribution Margin Ratio
Definition
CM Ratio = CM / Sales

CM Ratio - CM per Unit / Price per unit
Term
Breakeven
Definition
Level of which profit = 0

Sales - variable costs= CM - fixed expenses = profit
Term
Pre-Determined Overhead Rate
Definition
POHR = Estimated total manufacturing overhead cost / Estimated total amount of the allocation base
Term
Variable Costing
Definition
Product Costs: Direct Materials, Direct Labor, Variable Manufacturing Overhead

Period Costs:Fixed Manufacturing Overhead, Variable Selling and Administrative Expenses, Fixed Selling and Administrative Expenses
Term
Activity Based Costing Stages
Definition
1: Overhead costs are assigned to activity cost pools

2: Allocates overhead assigned to the activity cost pools to products or customers, using cost drivers
Term
Relevant Cost
Definition
Cost that differs between alternatives
Term
Avoidable Cost
Definition
Can be eliminated (in part or in whole) by choosing one alternative over another
Term
Opportunity Cost
Definition
Always relevant. What you could be making
Term
Return on Investment
Definition
ROI = Net Operating Income / Average Operating assets
Term
3 ways to increase ROI
Definition
Increase Sales
Reduce Operating Expenses
Reduce Operating Assets
Term
Residual Income
Definition
RI = Net Operating Income - (Average Operating Assets X Minimum Required ROR)
Term
Balanced Scorecard
Definition
incorporates financial and nonfinacnial measures in an integrated system that links performance measurement and a company's strategic goals
Term
Selling Price
Definition
= Cost + Markup

= (1+Markup Percentage) X Cost
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