Acct E2

ndifranco94's version from 2015-07-27 06:49


Question Answer
Audience for MA and FAMA = internal users, making decisions FA = external users, investing
Detail in MA and FAFA is aggregated, MA can be detailed, Ex. Production manager may need continuously updated financial info for alternative methods, but manager might only need once-monthly summary
MA standardsNO external standards, tailored to the needs of company or business unit
MA Cost analysis relevancegreater than GAAP b/c can consider nonproduction costs
Timing of FA and MAMA = looks at present and forecasts future; FA = looks at past nd reports on past
Why is MA better for decision making?more detailed. no standards, relevant cost analysis, timing, not just money
In order to expand operations or increase production, a company mustundrstand the behavior underlying its cost structure (FC and VC)
Activity Cost Drivercontributes to the cost of a product
4 cost behavior modelsVariable, Fixed, Mixed, Step
What are cost behavior models used for?predict how cost will change w/ inc or dec in activity, prepare for operations expansions and related activities
Sources of Ethical Responsbility for MAshort-term deferrments have long term consequences, Reporting Standard, Internal Control Systems, Corporate Social Responsilblity
Sunk Costs bad decisionBuy concert tix, get sick on day of event, go anyways so you don't waste your money --> WRONG, tix hve been paid for, just stay home