Managerial vs Financial
Focuses on providing information for internal decision makers.
Managerial Accounting
Means choosing goals and deciding how to achieve them
Planning
There are two types of traditional cost accounting systems
Job Order and Process
Used by companies that manufacture identical units through a series of uniform production steps or processes.
Process Costing
Focuses on the cost of activities as the building blocks for allocating indirect costs to products and services
Activity Based Costing
focuses on providing information for external decision makers
Financial Accounting
Involves running the day-to-day operations of a business
Directing
Companies use this to document the product costs for each job
Job Cost Record
Used to measure the amount of materials added to or work done on partially completed units and is expressed in terms of fully complete units.
EUPs - Equivalent Units of Production
The first step in developing an activity-based costing system is to
Identify the activities that will be used to allocate the manufacturing overhead
Accounting used to report monetary transactions and prepare financial statements
Financial
Is the process of monitoring day-to-day operations and keeping the company on track
Controlling
Companies use this to allocate estimated overhead costs to individual jobs.
Predetermined overhead allocation rate
The sum of direct labor and manufacturing overhead costs and represent the cost to convert direct materials into finished goods.
Conversion Costs
ABM decisions include:
–Pricing and product mix
–Cost management
It helps managers make decisions needed to be successful.
Managerial Accounting
A division manager must ensure that a company has enough materials on hand to meet the customers’ demand.
Directing
Can be easily and cost-effectively traced directly to the finished product
Direct Materials
Show the calculations for the physical flows and the cost flows of the products.
Production Cost Report
Is a costing system that simplifies accounting for companies.
Just-in-time costing
Helps show the relationship between departments and divisions and the managers who are responsible for each section
Organization Chart
Involves comparing actual results to expected results
Controlling
The predetermined overhead allocation rate =
Total estimated overhead costs / Total estimated quantity of the overhead allocation base
Two unique terms are used on a production cost report
To Account for and Accounted for.
A system that help managers improve the business’s performance by providing quality products and services is called
Quality management system (QMS).