ACCT 505
07/09/12:
In this class, we are going to look at ways that managers can use accounting information to make
business decisions. We will be looking at detailed accounting information and we will be formatting it
into reports and schedules that will enable us to make informed decisions. For managerial accounting,
we do not have to follow GAAP rules.
Managerial Accounting focuses on developing, interpreting, and applying accounting information for
managerial decision-making. Students learn the linkages between accounting information and
management planning through cost analysis (including activity-based costing), operational and capital
budgeting, and performance measurement.
Most of the course will be directed toward manufacturing companies.
Classification of manufacturing costs: Direct Materials, Direct Labor & Manufacturing Overhead.
Ascertaining Overhead is 1 of the main challenges in this course.
Prime Cost = Direct Material + Direct Labor
Conversion Cost = Direct Labor + Manufacturing Overhead
Variable cost varies as volume varies. (Variable cost per unit stays the same)
Study High-Low Method for ascertaining Fixed/Variable costs.
07/16/12:
There are 3 types of inventories: Raw Materials, Work In Process & Finished Goods. (Refer to Case Study
1)
Cost Driver= Denominator in determining POHR (Pre-determined overhead rate). This may be direct
labor hours or machine hours; dependent on which truly drives cost.
Re: Ethics Case 1 in Week 1- the manager was in essence asking Kristen to shift cost from COGS on the
Income Statement to Inventory on the Balance Sheet.
Higher Inventory = Lower COGS= Higher Net Income
Lower Inventory = Higher COGS= Lower Net Income
FIFO makes the Equivalent Units lower.
07/09/12:
In this class, we are going to look at ways that managers can use accounting information to make
business decisions. We will be looking at detailed accounting information and we will be formatting it
into reports and schedules that will enable us to make informed decisions. For managerial accounting,
we do not have to follow GAAP rules.
Managerial Accounting focuses on developing, interpreting, and applying accounting information for
managerial decision-making. Students learn the linkages between accounting information and
management planning through cost analysis (including activity-based costing), operational and capital
budgeting, and performance measurement.
Most of the course will be directed toward manufacturing companies.
Classification of manufacturing costs: Direct Materials, Direct Labor & Manufacturing Overhead.
Ascertaining Overhead is 1 of the main challenges in this course.
Prime Cost = Direct Material + Direct Labor
Conversion Cost = Direct Labor + Manufacturing Overhead
Variable cost varies as volume varies. (Variable cost per unit stays the same)
Study High-Low Method for ascertaining Fixed/Variable costs.
07/16/12:
There are 3 types of inventories: Raw Materials, Work In Process & Finished Goods. (Refer to Case Study
1)
Cost Driver= Denominator in determining POHR (Pre-determined overhead rate). This may be direct
labor hours or machine hours; dependent on which truly drives cost.
Re: Ethics Case 1 in Week 1- the manager was in essence asking Kristen to shift cost from COGS on the
Income Statement to Inventory on the Balance Sheet.
Higher Inventory = Lower COGS= Higher Net Income
Lower Inventory = Higher COGS= Lower Net Income
FIFO makes the Equivalent Units lower.
