Updated 2007-03-28 18:38



Question Answer
what are some key differences between managerial and financial accounting?financial: focused on the past and made for external purposes. aims to provide objectivity and summaries. must follow GAAP. managerial is focused on the future (on making decisions) and is made for internal uses. focused more on detail; need not follow GAAP.
what are some of the consequences of a JIT system?1. depends on a few ultra-reliable suppliers 2. can lead to improved layouts (manufacturing "cells") 3. can lead to complications with "setups"
what are the benefits of a JIT system?1. funds from inventory can be used elsewhere 2. space for storing inventory can be used more productively 3. throughput time is reduced 4. fewer defects
what are the two definining characteristics of total quality management?1. a focus on customer service 2. systematic problem-solving using teams of front-line workers
describe process reengineeringa more radical approach than TQM in which all processes are scrutinized and redesigned. every step must add value. more likely to come from above than TQM.
what is a product cost?one that, according to the matching principle of financial accounting, is ascribed when the product it is associated with is actually sold and the revenue from it is realized.
what is another term for product costs?inventoriable, because they are initially ascribed to inventory
what are period costs? give examplesall non-product costs, not included in the cost of goods. examples include all selling and administrative expenses.
what are the three classes of inventory in a manufacturing company?1. raw materials 2. finished goods 3. work in process
describe the theory of constraintsthe theory that effectively managing the constraint, or bottleneck, is a key to success. focusing on the weakest link yields the greatest benefit.
what are the three main categories of manufacturing costs?1. direct materials 2. direct labor 3. manufacturing overhead
define direct materialsthose that become an integral part of the finished product and can be physically and conveniently traced back to it
define direct laborlabor costs that can be physically and conveniently traced to individual units of product (indirect labor is part of manufacturing overhead)
define manufacturing overheadall costs except direct materials and direct labor. sometimes called "conversion cost"
define marketing or selling coststhose necessary to secure customer orders and get the finished product to the customer, e.g., advertising, shipping, sales commissions
what are the two main categories of non-manufacturing costs?1. marketing or selling costs 2. administrative costs
define cost of goods *manufactured*manufacturing costs associated with goods finished during the period
describe cost of goods *sold* in a manufacturing companycost of goods sold = beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory
what is another way to think of "work in process"?as being on the assembly line
why does it matter that product costs are the same as inventoriable costs?because if goods are unsold or only partially completed at the end of a period, they can end up on the balance sheet as assets
what is a variable cost? give an exampleone that varies, in total, in direct proportion to changes in the level of activity. direct materials are an example.
in what sense can a cost actually be "fixed"within a relative range
what is an example of a fixed cost?rent
what is a cost object?anything for which data is desired
what is a direct cost?one that can be easily and conveniently traced back to the particular cost object under consideration
what is an indirect cost?one that cannot easily or conveniently be traced back to the cost object under consideration
what is an example of an indirect cost?a manager's salary.
true or false? a common cost is a type of indirect costTRUE
what is differential cost or revenue?the difference in effect between two alternatives
what is another term for differential cost?incremental cost
what economics concept is similar to that of differential cost?marginal cost--basically concept applied to a single unit
to what is the overtime premium charged, and why?manufacturing overhead. to charge to one job or another would be unfair to the last one.
labor fringe benefits are charged to ___________.depends. can be seen as direct or indirect labor.
what are the four types of quality costs?1. prevention costs 2. appraisal (inspection) costs 3. internal failure costs 4. external failure costs
what is the drawback to appraisals (inspections)?ineffective and expensive