Product vs Period
Wooden materials used to manufacture chairs
Product Cost
Are Direct Materials a Upstream, Midstream, or Downstream cost?
Midstream
Screws used to build tables
Direct Materials
What is a Fixed Cost?
Cost that does not change regardless of a change in volume
Does Managerial Accounting provide information to internal users or external users?
Internal Users
Paint used to produce shelves
Product Cost
Is Research & Development (R&D) an Upstream, Midstream, or Downstream cost?
Upstream
Wages of Production Workers
Direct Labor
What is Variable Cost?
When total cost changes in direct proportion to a change in volume
Is Managerial Accounting future-oriented or historically based?
Future-Oriented
Are advertising expenses a product or period cost?
Period Cost
Is Shipping an Upstream, Midstream, or Downstream cost?
Downstream
Rent for Office Building
None
Does the Variable Cost Per Unit increase, decrease, or stay the same with an increase in volume?
Stays the same
Is Managerial Accounting regulated by GAAP, SEC, or FASB?
None
It is only restricted by the Value-Added Principle
Salary of CEO
Period Cost
Is warehousing of raw materials an Upstream, Midstream, or Downstream cost?
Upstream
Cleaning supplies used on manufacturing machinery
Manufacturing Overhead
Does the fixed cost per unit increase, decrease, or stay the same as volume increases?
Decrease
What are the three components of Product Costs?
Direct (Raw) Materials
Direct Labor
(Manufacturing) Overhead
Is Factory Rent a product or period cost?
Product
Is Sales Commission an Upstream, Midstream, or Downstream cost?
Downstream
Salary of Factory Floor Supervisor
Manufacturing Overhead
What is the income statement (equation) under the contribution margin approach?
Revenue
- Variable Cost
= Contribution Margin
- Fixed Cost
= Net Income
What are the three responsibilities of management?
Plan, Direct, and Control