Chapter 15 Managerial and Financial Accounting Exam verified solutions and explanations.

Chapter 15 Managerial and Financial Accounting Exam verified solutions and explanations Financial Accounting - Correct Answers: accounting information and analyses prepared for people outside the organization. Examples include: Shareholders Creditors Government agencies The general Public Managerial Accounting - Correct Answers: accounting used to provide information and analyses to managers inside the organization to assist them in decision making. The information includes Historical Data and Estimated data. Phases of the management process - Correct Answers: Planning Directing Controlling Planning - Correct Answers: management uses planning in developing the company's objective goals and translating these objectives into courses of action. E.g: Increase the advertising budget open a new sales territory Increase the research and development budget Directing - Correct Answers: The process by which managers run day-to-day operations Controlling - Correct Answers: Monitoring operating results and comparing actual results with the expected results is controlling. Improving - Correct Answers: Feedback is also used by managers to support continuous process improvement. Continuous process improvement is the philosophy of continually improving employees, business processes, and products. Decision making - Correct Answers: In managing a company, managment must continually decide among alternative actions. Direct Costs - Correct Answers: costs that are incurred directly as the result of some specific cost object Indirect Costs - Correct Answers: Costs that cannot be easily and accurately traced to a cost object. Prime Costs - Correct Answers: Consist of direct materials and direct labor costs Conversion Costs - Correct Answers: Consist of direct labor and factory overhead costs. Material Inventory - Correct Answers: Inventory that consists of the costs of the direct and indirect materials that have not yet entered the manufactured process work in process inventory - Correct Answers: Inventory that consist of the direct materials, direct labor, and factory overhead costs for products that have entered the manufacturing process but are not yet completed Cost of Goods Manufactured - Correct Answers: Total cost of work in process less the cost of the ending work in process inventory. the cost of manufacturing the goods that were finished during the period Cost of Goods sold - Correct Answers: The cost of finished goods available for sale minus the ending finished goods inventory. the total cost of merchandise sold during the period Direct Materials Cost - Correct Answers: The cost of materials that are an integral part of the finished product. Direct Labor Cost - Correct Answers: The wages of factory workers who are directly involved in converting materials into a finished product. Factory Overhead Cost - Correct Answers: all of the costs of operating the factory except for direct materials and direct labor Product Costs - Correct Answers: All costs that are involved in acquiring or making a product. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead. Period Costs - Correct Answers: -costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued -Consist of selling and administrative costs