Managerial Accounting | Concepts, Costs & Ethical Standards
What is the definition of 'Cost' in Cost is the amount of cash or cash equivalent
managerial accounting? sacrificed for goods and/or services that bring a current
or future benefit to the organization.
What happens to costs used up in the They are called expenses and are deducted from
production of revenues? revenues on the income statement to determine
income (profit).
What is 'Price' in the context of Price is the revenue per unit sold.
revenue?
What is 'Revenue'? Revenue is the total amount earned from selling goods
or services.
What are 'Cost Objects'? Cost objects are items such as a product, customer,
department, project, geographic region, or plant for
which costs are measured and assigned.
What is the purpose of managerial They are structured to measure costs and assign costs
accounting systems? to entities (cost objects).
What does 'Accumulating Costs' refer It refers to the way that costs are measured and
to? recorded within an accounting system.
What is meant by 'Assigning Costs'? Assigning costs links a cost to a cost object, explaining
why the money was spent.
What are 'Direct Costs'? Direct costs are costs that can be easily and accurately
traced to a cost object.
What are 'Indirect Costs'? Indirect costs cannot be easily and accurately traced to
a cost object and are allocated using a reasonable
method.
Grade A+ | Updated
, Managerial Accounting | Concepts, Costs & Ethical Standards
What is an example of allocating Electricity can be allocated to machine hours or labor
indirect costs? hours depending on consumption.
What is a 'Variable Cost'? A variable cost increases in total as output increases
and decreases as output decreases.
What is a 'Fixed Cost'? A fixed cost does not change in total as output
increases or decreases.
What is 'Opportunity Cost'? Opportunity cost is the net benefit given up or sacrificed
when one alternative is chosen over another.
How does data analytics relate to Data analytics helps connect strategy and key goals to
management accounting? improve decision making throughout the company.
What fundamental questions must be Questions include why measure, what to measure, how
answered in data analytics for to measure, where to obtain data, which approach to
management accounting? employ, how to interpret results, and who to
communicate with.
How does management accounting use It uses data analytics to improve product and service
data analytics? design, cost forecasting and budgeting, product and
service pricing, and cost management.
Can the same cost be both direct and Yes, a cost can be direct for one purpose and indirect
indirect? for another, such as salaries paid to purchasing
department employees.
What is the role of management Management accounting provides insights into financial
accounting in decision making? success and failure, guiding business decisions.
Grade A+ | Updated
What is the definition of 'Cost' in Cost is the amount of cash or cash equivalent
managerial accounting? sacrificed for goods and/or services that bring a current
or future benefit to the organization.
What happens to costs used up in the They are called expenses and are deducted from
production of revenues? revenues on the income statement to determine
income (profit).
What is 'Price' in the context of Price is the revenue per unit sold.
revenue?
What is 'Revenue'? Revenue is the total amount earned from selling goods
or services.
What are 'Cost Objects'? Cost objects are items such as a product, customer,
department, project, geographic region, or plant for
which costs are measured and assigned.
What is the purpose of managerial They are structured to measure costs and assign costs
accounting systems? to entities (cost objects).
What does 'Accumulating Costs' refer It refers to the way that costs are measured and
to? recorded within an accounting system.
What is meant by 'Assigning Costs'? Assigning costs links a cost to a cost object, explaining
why the money was spent.
What are 'Direct Costs'? Direct costs are costs that can be easily and accurately
traced to a cost object.
What are 'Indirect Costs'? Indirect costs cannot be easily and accurately traced to
a cost object and are allocated using a reasonable
method.
Grade A+ | Updated
, Managerial Accounting | Concepts, Costs & Ethical Standards
What is an example of allocating Electricity can be allocated to machine hours or labor
indirect costs? hours depending on consumption.
What is a 'Variable Cost'? A variable cost increases in total as output increases
and decreases as output decreases.
What is a 'Fixed Cost'? A fixed cost does not change in total as output
increases or decreases.
What is 'Opportunity Cost'? Opportunity cost is the net benefit given up or sacrificed
when one alternative is chosen over another.
How does data analytics relate to Data analytics helps connect strategy and key goals to
management accounting? improve decision making throughout the company.
What fundamental questions must be Questions include why measure, what to measure, how
answered in data analytics for to measure, where to obtain data, which approach to
management accounting? employ, how to interpret results, and who to
communicate with.
How does management accounting use It uses data analytics to improve product and service
data analytics? design, cost forecasting and budgeting, product and
service pricing, and cost management.
Can the same cost be both direct and Yes, a cost can be direct for one purpose and indirect
indirect? for another, such as salaries paid to purchasing
department employees.
What is the role of management Management accounting provides insights into financial
accounting in decision making? success and failure, guiding business decisions.
Grade A+ | Updated
