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Questions and Answers
What is the focus of managerial accounting?
Cost accounting uses future data for planning.
False
What is cost management?
A broader concept that encompasses the planning, monitoring, and controlling of costs.
Cost classified by ______ includes current, forecasted, qualitative, and non-monetary aspects.
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Which of the following is a role of management accountants?
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Cost accounting informs management with timely cost information.
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Match the following cost classifications with their descriptions:
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Study Notes
Introduction to Cost Management & Accounting
- Cost Accounting is an internal reporting system that provides product costing and other information used by managers in performing their functions.
- Cost Management is a broader concept that encompasses the planning, monitoring, and controlling of costs.
- Cost Accounting and Cost Management are the intersection between financial and managerial accounting.
- Financial Accounting takes all the data (including management accounting) and presents it in a standardized way for external stakeholders.
- Managerial Accounting focuses on the needs of parties within the organization, addressing individual or divisional concerns.
Factors Affecting the Use of Cost Management
- Information used in cost accounting can be historical, quantitative, monetary, and verifiable.
- Information used in managerial accounting is more concerned on the timing and relevance of information for decision making. It can be current/forecasted, quanti/quali, non/monetary, future data, and the cost may not be recorded in the books.
The Role of Management Accountants
- Management accountants provide information and analysis to help managers make informed decisions.
- Accounting has an ethical conduct that must be followed when collecting, recording, and analyzing data.
Accounting Information System
- The accounting information system is a system for collecting, recording, processing, and reporting financial and other information.
- Data analytics is crucial for cost management and decision making.
Cost Concepts & Classifications
- Cost can be classified by nature (materials, labor, overhead), production (direct, indirect), traceability (direct, indirect), common/joint, accounting period, and decision-making purposes.
Cost Accounting Cycle
- The cost accounting cycle is a process of accumulating, recording, and summarizing cost data.
- The three main inventory accounts are raw materials, work-in-progress, and finished goods.
- The elements of manufacturing cost are direct materials, direct labor, and manufacturing overhead.
Statement of COGS in Manufacturing
- The statement of cost of goods sold (COGS) reports the costs associated with producing goods sold during a period.
- COGS is a vital element in the calculation of net income.
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Description
This quiz explores key concepts in cost management and accounting, including the differences between cost accounting and financial accounting. It also delves into the factors affecting cost management practices relevant to decision-making within organizations.
