WGU Managerial Accounting UFC1 - Questions With
Easy-to-Follow Solutions
Accounting Formula Right Ans - Assets = Liabilities + Owner's Equity
Managerial Accounting Right Ans - Provides economic and financial
information for managers and other internal users.
Purpose: Provide useful info to decision makers
Trends in managerial accounting Right Ans - 1. Customer orientation - an
increased emphasis on customers being the most important constituents of
business. Understand the changing needs and wants of their customers and
align their management and operating practices accordingly.
2. Global economy - Expands competitive boundaries and provides customers
more choices.
3. E-commerce - Consumers expect to be able to buy items electronically,
whenever and where ever they want.
4. Service economy - Service businesses typically account for over 60-70% of
total economic activity.
5. Lean Business Model - SEE VALUE CHAIN
6. Value chain - SEE VALUE CHAIN
Comparing Managerial and Financial Accounting Right Ans - 1. managerial
accounting also reports non-financial information.
2. financial accounting information is generally used by external users,
whereas managerial accounting information is used by internal decision
makers.
3. managerial accounting is not constrained by GAAP.
4. managerial accounting information is provided quickly, whereas financial
accounting usually needs an audit.
Management Functions Right Ans - Planning, Directing, Controlling
Planning Right Ans - Requires managers to look ahead and to establish
objectives.
,Objectives: maximizing short-term profits, market share, maintaining a
commitment to environmental protection, and contributing to social
programs. OBJECTIVES THAT ADD VALUE
Directing Right Ans - Involves coordinating diverse activities and human
resources to produce a smooth-running operation (Implement planned
activities - purchasing, manufacturing, warehousing and selling, scheduling)
and providing necessary incentives to motivate employees
Controlling Right Ans - the process of keeping the company's activities on
track, monitoring planning decisions and evaluating an organizations
activities and employees (determine whether planned goals are met,
deviations from objectives, getting back on track)
Organization charts Right Ans - diagrams that depict the formal structures
of organizations - to show the interrelationships of activities and the
delegation of authority and responsibility within the company.
3 Types of industry Right Ans - 1. Manufacturing
2. Merchandising
3. Service
Manufacturing Right Ans - activities and processes that convert raw
materials/labor into finished goods.
Merchandising Right Ans - sell ready for sale products they purchase from
other businesses to customers
Three Inventories of a manufacturer: Right Ans - 1. Raw materials - Basic
materials and parts used (directly/indirectly) in the manufacturing process
2. Work in process - products being manufactured but not yet complete
3. Finished goods - completed, ready for sale
Direct Materials Right Ans - Raw materials that are physically and directly
associated with the finished product during manufacturing - i.e. flour in
baking of bread...
Direct materials Formula
Raw materials inventory, beginning
, + Raw material purchases
= Raw materials available
- Raw materials inventory, ending
= Total Direct materials Used
Unit Material cost
Total materials cost/EU of materials
Indirect Materials Right Ans - raw materials that cannot be easily
associated with the finished product or to small to be counted, only used in
support production processes, typically listed as factory supplies on balance
sheet. (washers, bolts, finish on a product kayak)
Direct Labor Right Ans - the work of factory employees physically/ directly
associated with converting raw materials into finished goods
Indirect Labor Right Ans - the work of employees not physically/directly
associated with converting raw materials into finished products or for which
it is impractical to trace costs to the goods produced (factory maintenance
people, factory supervisors)
Manufacturing Overhead Right Ans - Indirect costs - cannot be easily traced
to a single cost object - indirect materials, indirect labor, overtime,
depreciation on factory buildings and machines, and insurance, taxes and
maintenance on factory facilities, rent, depreciation, accounting/legal
services, heat, electricity, etc.
costs indirectly associated with the manufacture of the finished product.
[Estimate - Direct Materials 54%, Direct labor 13% manufacturing overhead
33%]
Product Costs Right Ans - costs that are a necessary and integral part of
producing/ manufacturing the finished product (inventory - direct materials,
direct labor, manufacturing costs (overhead))
Period Costs Right Ans - Costs that are matched with the revenue of a
specific time period and charged to expense as incurred (selling and
administrative expenses - not a part of manufacturing)
Easy-to-Follow Solutions
Accounting Formula Right Ans - Assets = Liabilities + Owner's Equity
Managerial Accounting Right Ans - Provides economic and financial
information for managers and other internal users.
Purpose: Provide useful info to decision makers
Trends in managerial accounting Right Ans - 1. Customer orientation - an
increased emphasis on customers being the most important constituents of
business. Understand the changing needs and wants of their customers and
align their management and operating practices accordingly.
2. Global economy - Expands competitive boundaries and provides customers
more choices.
3. E-commerce - Consumers expect to be able to buy items electronically,
whenever and where ever they want.
4. Service economy - Service businesses typically account for over 60-70% of
total economic activity.
5. Lean Business Model - SEE VALUE CHAIN
6. Value chain - SEE VALUE CHAIN
Comparing Managerial and Financial Accounting Right Ans - 1. managerial
accounting also reports non-financial information.
2. financial accounting information is generally used by external users,
whereas managerial accounting information is used by internal decision
makers.
3. managerial accounting is not constrained by GAAP.
4. managerial accounting information is provided quickly, whereas financial
accounting usually needs an audit.
Management Functions Right Ans - Planning, Directing, Controlling
Planning Right Ans - Requires managers to look ahead and to establish
objectives.
,Objectives: maximizing short-term profits, market share, maintaining a
commitment to environmental protection, and contributing to social
programs. OBJECTIVES THAT ADD VALUE
Directing Right Ans - Involves coordinating diverse activities and human
resources to produce a smooth-running operation (Implement planned
activities - purchasing, manufacturing, warehousing and selling, scheduling)
and providing necessary incentives to motivate employees
Controlling Right Ans - the process of keeping the company's activities on
track, monitoring planning decisions and evaluating an organizations
activities and employees (determine whether planned goals are met,
deviations from objectives, getting back on track)
Organization charts Right Ans - diagrams that depict the formal structures
of organizations - to show the interrelationships of activities and the
delegation of authority and responsibility within the company.
3 Types of industry Right Ans - 1. Manufacturing
2. Merchandising
3. Service
Manufacturing Right Ans - activities and processes that convert raw
materials/labor into finished goods.
Merchandising Right Ans - sell ready for sale products they purchase from
other businesses to customers
Three Inventories of a manufacturer: Right Ans - 1. Raw materials - Basic
materials and parts used (directly/indirectly) in the manufacturing process
2. Work in process - products being manufactured but not yet complete
3. Finished goods - completed, ready for sale
Direct Materials Right Ans - Raw materials that are physically and directly
associated with the finished product during manufacturing - i.e. flour in
baking of bread...
Direct materials Formula
Raw materials inventory, beginning
, + Raw material purchases
= Raw materials available
- Raw materials inventory, ending
= Total Direct materials Used
Unit Material cost
Total materials cost/EU of materials
Indirect Materials Right Ans - raw materials that cannot be easily
associated with the finished product or to small to be counted, only used in
support production processes, typically listed as factory supplies on balance
sheet. (washers, bolts, finish on a product kayak)
Direct Labor Right Ans - the work of factory employees physically/ directly
associated with converting raw materials into finished goods
Indirect Labor Right Ans - the work of employees not physically/directly
associated with converting raw materials into finished products or for which
it is impractical to trace costs to the goods produced (factory maintenance
people, factory supervisors)
Manufacturing Overhead Right Ans - Indirect costs - cannot be easily traced
to a single cost object - indirect materials, indirect labor, overtime,
depreciation on factory buildings and machines, and insurance, taxes and
maintenance on factory facilities, rent, depreciation, accounting/legal
services, heat, electricity, etc.
costs indirectly associated with the manufacture of the finished product.
[Estimate - Direct Materials 54%, Direct labor 13% manufacturing overhead
33%]
Product Costs Right Ans - costs that are a necessary and integral part of
producing/ manufacturing the finished product (inventory - direct materials,
direct labor, manufacturing costs (overhead))
Period Costs Right Ans - Costs that are matched with the revenue of a
specific time period and charged to expense as incurred (selling and
administrative expenses - not a part of manufacturing)
