MA 1 facile aperto

Financial accounting serves external parties like stockholders, creditors, and regulators, while managerial accounting provides information to internal managers for planning, control, and decision-making.

Direct costs are easily traced to a unit of product or cost object, such as direct material and direct labor, while indirect costs cannot be easily traced to a unit of product and include manufacturing overhead.

Common costs are incurred to support multiple cost objects and cannot be directly associated with a single cost object.

<p>Product costs include direct materials, direct labor, and manufacturing overhead and are relevant for evaluating cost of goods sold and inventory on financial statements. Non-manufacturing costs are divided into selling costs (necessary to secure orders and deliver products) and administrative costs (executive, organizational, and clerical costs).</p> Signup and view all the answers

<p>Product costs attach to a unit of product as it's purchased or manufactured and remain attached to each unit in inventory until sold. For manufacturing companies, product costs include raw materials, work in process, and finished goods costs.</p> Signup and view all the answers

<p>Direct materials costs are transferred from raw materials to work in process when used in production.</p> Signup and view all the answers

<p>Managerial accounting is different from financial accounting as it focuses on providing quantitative information for internal use by management, while financial accounting is concerned with providing financial information to external parties such as investors, creditors, and regulators.</p> Signup and view all the answers

<p>The audience for managerial accounting information is the management, ranging from top management to operational levels within the organization.</p> Signup and view all the answers

<p>Managerial accounting provides quantitative information that is used at all levels of the organization for internal decision-making purposes.</p> Signup and view all the answers

<p>In managerial accounting, the management typically requires aggregate measures of the company and does not need detailed information, whereas financial accounting provides detailed information for external reporting purposes.</p> Signup and view all the answers

<p>The scope of managerial accounting is broader and encompasses a wider range of information for internal decision-making, whereas financial accounting is more focused on external financial reporting and follows specific accounting principles.</p> Signup and view all the answers

<p>In managerial accounting, there are free formats for organizing information, while financial accounting follows specific accounting principles and formats for external reporting.</p> Signup and view all the answers

<p>Product costs include direct labor, direct materials, and manufacturing overhead, and are assigned to units of product. Period costs include selling and administrative costs, and are expensed in the period incurred.</p> Signup and view all the answers

<p>Variable costs vary in direct proportion to changes in the level of activity, while fixed costs remain constant regardless of changes in activity.</p> Signup and view all the answers

<p>Committed fixed costs are long-term and cannot be significantly reduced in the short term, while discretionary fixed costs may be altered in the short term by current managerial decisions.</p> Signup and view all the answers

<p>Relevant costs are costs that differ between alternatives and are important in decision-making, while irrelevant costs do not differ between alternatives and can be ignored in decision-making.</p> Signup and view all the answers

<p>Opportunity cost is the potential benefit given up when one alternative is selected over another and should be explicitly considered in every decision.</p> Signup and view all the answers

<p>Sunk costs have already been incurred and cannot be changed now or in the future, so they should be ignored when making decisions.</p> Signup and view all the answers

<p>Financial accounting is focused on external persons making financial decisions, with a historical perspective and emphasis on objectivity and verifiability. Managerial accounting is concerned with managers planning for and controlling an organization, with a future emphasis and focus on relevance, precision, and timeliness.</p> Signup and view all the answers

<p>Financial accounting has a primary focus on companywide reports, must follow GAAP/IFRS and prescribed formats, and is mandatory for external reports.</p> Signup and view all the answers

<p>Managerial accounting focuses on segment reports, is not bound by GAAP/IFRS or any prescribed format, and is not mandatory.</p> Signup and view all the answers

<p>Managerial accounting involves planning, controlling, and decision-making activities, such as establishing goals, developing budgets, and making selections among competing alternatives.</p> Signup and view all the answers

<p>To become a Certified Management Accountant (CMA), membership in the Institute of Management Accountants, a bachelor's degree, two years of relevant professional experience, and passage of the CMA exam are required.</p> Signup and view all the answers

<p>The Chartered Global Management Accountant (CGMA) designation, co-sponsored by the AICPA and CIMA, requires a bachelor's degree in accounting, passage of the CPA exam, membership in the AICPA, three years of relevant management accounting work experience, and passage of the CGMA exam.</p> Signup and view all the answers

<p>Cost-volume-profit analysis is used to determine the quantity of break-even or the sales needed to break-even, assess targeted income, calculate the margin of safety, and measure the impact on profits of changes in selling price, cost, or volume.</p> Signup and view all the answers

<p>The formula for determining break-even quantity is: $Q = \frac{Fixed: Costs + Targeted: Income}{Selling: Price - Variable: Cost: per: Unit}$</p> Signup and view all the answers

<p>The degree of operating leverage measures the percentage change in profit associated with a change in volume or sales.</p> Signup and view all the answers

<p>Managers typically assume constant selling price, linear costs, and constant product mix for cost-volume-profit calculations.</p> Signup and view all the answers

<p>The contribution margin is the amount remaining from sales revenue after variable expenses have been deducted.</p> Signup and view all the answers

<p>The contribution format income statement can be expressed as: $Profit = (Sales - Variable: Expenses) - Fixed: Expenses$</p> Signup and view all the answers