7975667-ACC-310F-Flashcards
Fiscal Year ...,000+; diff= -work-in-proc. (end)..........14,and owner's equity on a specific date. Accounting Equation ...,6874 = #books to sell 6874 magazines and 6874 books must be sold to break even with a 4:1 ratio Break even for profit Pluging in CM in $ yeilds "BE units" SP - VC - FC = Profit plugging in CM% yeals SP or "Revenue" express VC as a percentage of SP: SP - SP% - FC = Profit Operating Leverage leverage = increases FC (add debt) to lower VC,constraints Chapter 12 say 12 CVP Analysis (Cost-Volume-Profit) ...,or for a category of costs. Gains and Loses low on statement? Net Income Profit Net Sales Revenue Cost of goods sold ...,000; AFS-EI DL used...........................$12,6874 = 0 125x - 59x - 198,6874 FG beg + COGM = availabe FG available FG - FG end = COGS Predetermined overhead rate applying ....A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period. It is computed by dividing the estimated total manufacturing overhead cost for the period by the estimated total amount of the allocation base for the period. Overhead -------------- Cost driver Cost driver => Dir. Labor Hours or Dir. Mach. DD Payables ...,Wages Indirect cost Costs that cannot be economically identified to a cost object. These costs are accounted for in overhead. ex. Bike shop: air,investing and financing activities,A 12-month pd,increase CM -> increasesd operating income (magnifies profit or loses) - really good when expecting high sales - really bad for low sales no leverage = increases VC to lower FC (debt) = lower CM -> lower operating income High Sales-|----better----|------worse Low Sales--|---worse----|------better ......................|.Leverages.|.No LEverage degree of operating leverage can be determined by: TS - TVC = Total CM $ contribution margin $ / operation income = degree of operating leverage higher # = higher degree of leverage absorption income statement Sales-COGS = Gross Margin => GM - SG&A = Net Income Absorbs all MC. +Sales - manufacturing costs: = COGS - - Direct materials - - direct labor - - variable overhead - - fixed overhead
=__GM__ - Selling expenses - - variable sales - - fixed salaries - Administrative expenses - - variable wages - - fixed legal fees =____Net Income_____ contribution income statement Sales - VC = Contribution Margin => CM - FC = Net Income income statement that groups costs into variable costs and fixed costs to highlight the contribution margin. more useful for decision making. Only Variable costs in MC. +Sales - manufacturing costs: = variable COGS - - direct materials - - direct labor - - variable overhead -Other variables - - variable selling expenses - - variable admin fees = __CM__ -Fixed Costs - - fixed selling - - fixed admin - - fixed overhead =_____Net Income______ Direct cost Costs economically identified to a cost object. ex. Bike Shop: Metal,or activity where costs are incurred economically identifiable ability to identify how much material,or once sold,000.....; start +DM purchases............25,adjusted at the end period before financial statements. (accrued interest payable,retained earnings,COGS 1. Direct materials - attributable to each product 2. Direct labor - cost attributable to each product 3. Overhead - indirect materials/labor,Assets = Liabilities + Owner's Equit Assets Current Assets Liabilities Current Liabilities Stockholders Equity Common Stock Cash money Inventory ...,the time when it was believed that people with mental illnesses were seen as possessed by demons (exorsism,and other elements of owners' equity. common stock ...,X=independent variable (the activity level) high-low method Used to calculate the cost formula. This method is rather unreliable because it only uses two points of data and only works inside one relevant range. Y = total costs X = activity level 1) identify high (X₂) and low (X₁) activity levels and associated costs for each respective period (Y₂ and Y₁) 2) dividedifference in total costs by difference in activity level Y₂ - Y₁ / X₂ - X₁ = V V = variable costs cost volume profit analysis of different pricing alternatives on the business's profitability Contribution margin format an income statement format in which variable costs are subtracted from revenues to show contribution margin,selling,and reconciles beginning and ending cash and cash equivalents. Bookkeeping
...,or other costs go into a cost object. overhead (OH) Any cost not specifically associated with production of identifiable products and services; expenses incurred in the normal operation of a business. Manufacturing costs All inventoriable - go into inventory,6874 FG end .......20,salaries,13 Terms in this set (107) Chapter 1 Accounting Present & Past. Accounting A system for providing quantitative,Financial: used by decision makers outside of the company Managerial,admin costs,financial information about economic entities that is useful for making sound economic decisions. Accounting provides the means of recording and communicating business activities and the results of those activities. Users/uses of accounting information ...Everyone with money or interest in money Financial Accounting Accounting information and analyses prepared for people outside the organization. CPA (Certified Public Accountant) Type of public accountant. CPA is not part of the company and will audit the books (make sure you are reporting transaction appropriately) Managerial/ Cost accounting Accounting used to provide information and analyses to managers inside the organization to assist them in decision making. CMA (Certified Management Accountant) accountant who works for single company Controller (comptroller) the top managerial and financial accountant in an organization. supervises the accounting department and assists management at all levels in interpreting and using managerial accounting information Auditing (Public Accounting) A systematic process of (1) objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria; and (2) communicating the results to interested parties. Internal Auditing smaller scale audit. May be responsible for things like reviewing the financial statements of a single plant or for analyzing the operating efficiency of an entities activities. (CIA) Certified Internal Auditor a professional designation issued by the Institute of Internal Auditors signifying expertise in internal auditing Governmental/ Not-For-Profit Accounting same as for any business/ entity Income Tax Accounting Accounting Classification Early History ...,Calculated by deducting total variable costs from the total revenue._______ means the amount is a contribution to fixed expenses and operating income from the sale of products or services. Contribution margin vs Gross margin two completely separate
terms. CM = sales - VC ; used in managerial acct. GM = sales - COGS ; used in fin. acct. contribution margin ratio A ratio computed by dividing contribution margin by dollar sales. Also found by: CM per unit / Sales Price per unit. expanded contribution margin model SP = Sales Price VC = Variable Costs FC = Fixed costs break even point The point at which the number of units sold generates just enough revenue to equal the total costs. At this point,rent cost object a product,6874 = #mag to sell 4(x) = 4(3000) = 12,identification of whether a cost is fixed or variable variable cost Costs that change directly with the amount of production (e.g. energy,much of which is done today by computers. Limitations ...,bloodletting,and owner's equity,ensuring adequate funding of FASB activities and exercising general oversight of the FASB's activities FASB (Financial Accounting Standards Board) ...,organizing,F=vertical (y) intercept (the total fixed cost),wages,and in the elections of Boards members. Additonal paid-in capital ...,internal decision making production standards expected or allowed times and costs to make a product or perform an activity cost behavior pattern ...,V=slope of the line (the variable cost),Financial reports that summarize the financial condition and operations of a business Balance Sheet ...,Tires,supply and labor costs). fixed cost Business costs,insurance - A. variable overhead - B. fixed overhead Product vs Period Costs Product Product Costs All inventoriable costs. Manufacturing expenses. Period Costs All non-inventoriable costs. ex. advertising,6874 Break Even Equ: SP - VC - FC = 0 [SP1(x) + SP2(x)] - [VC1(x) +VC2(x)] - FC = 0 => [30( x) + 5(x)] - [14( x) +3(x)] - 198,An equation showing the relationship among assets,bonuses) Income Statement A financial statement that presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time.(Add lecture notes) Revenue Companies earn this from the sale of a good or service to a customer. They are normally reported for goods or services that have been sold to a customer whether or not they have yet been paid for. They
are an increase in assets or settlements of liabilities from on going operations. (EDIT) Expenses ...,department,Accumulated undistributed earnings of a company retained for future needs or for future distribution to its owners. net-income - dividends Dividends A distribution of the net income of a business to its owners Statement of Cash Flows A statement of cash flows is one of the basic financial statements that is required as part of a complete set of financial statements prepared in conformity with generally accepted accounting principles. It categorizes net cash provided or used during a period as operating,profits are zero. Can be calculated by: FC / CM$ per unit. = Units sold to break even FC / CM% ratio = Revenue generated to break even (SP)X - (VC)X - FC = 0 \________/ =CM^ sales mix ...,This measurment shows the amount of profit that can be assigned to each share of common stock. Stockholders and potential investors use this ratio to judge a company's performance. Statement of Changes in Stockholders Equity ...,Represents ownership in a publicly held company which entitles owners to dividends (if declared by the company's Board of Directors),liabilities,October through Septmeber,or volume of activity Management process planning,6874 Total OH Costs................$14,An expense is an outflow of money to another person or group to pay for an item or service,6874 = 0 (120x + 5x) - (56x + 3x) - 198,The financial statement that summarizes the changes during a fiscal period in capital stock,issued by the IASB (international accounting standards board) that have been adopted by many countries outside the Unites State IASB (International Accounting Standards Board) ...,General and Administrative Expenses,000.....; get mat. ---------------------------------------- DM available for sale.....60,(net income - prefered dividends) / shares of common stock outstanding,and trephening) U.S. Accounting Past ... U.S Accounting Present ... AICPA (American Institute of Certified Public Accountants) professional organization of certified public accountants SEC (Securities and Exchange Commission) ... Government agency that regulates the sale of stocks and bonds and insider trading. FAF (Financial Accounting Foundation) ....Responsible for selecting members of FASB and its Financial Accounting Standards Advisory Council (FASAC),costs,such as raw
materials or goods for sale Depreciation A measure of how much a tangible asset (such as plant or equipment) has been "used up" or consumed Accounts Payable The liabilities that result when the company buys inventory,for planning the federal budget Financial Statement ...,involves using cost behavior patterns to interpret and forecast the changes in operating income that result from changes in revenues,(operating expenses outside manufacturing) Prime vs. Conversion Cost both include DL because it is small Conversion sum of direct labor and overhead costs Conversion = OH + DL prime costs sum of direct materials and direct labor Prime = DL + DM Transferring costs among accounts Manufacturing Costs = DM + DL + OH => all ^ costs go into: work-in-process inventory => goes to: finished goods inventory (ready to be sold) => after selling costs of goods sold (expense of inventory) Cost of Goods Manufactured Statement Ex. MANUFACTURING COSTS { DM beginning................35,we can accurately compare year to year; company to company" FASB Codification Primary Goal: Provide in one place all the authoritative literature related to a particular topic ASU (Accounting Standards Update) ... SOX Sarbanes-oxley act of 2002: enacted in response to the financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices. Other Standard Setters ...dont worry about it IFRS (International Finance Reporting Standards) ...,Any expenses directly involved in producing or selling a good or service during a given time period. Gross profit ...,and controlling the use of resources to accomplish performance goals Financial vs. Managerial ...,which is a major non-production costs presented in an Income statement. margin of safety _____|________________|______ ........BE.---------MoS----------.PS......... The difference between planned sales and break even sales. All terms in "unit sales". MoS = PS - BE sales mix and break even point Example - bookstore (two products) Sales Mix = 4 books : 1 mag SP1 book = $30 SP2 mag = $5 VC1 book = $14 VC2 mag = $3 FC = 198,6874 -------------------------- - - - ------------ -------------------------------------------- FG beg .......12,supplies or incurs expenses on credit Accounts Recievable The asset arising from
selling goods or services on credit to customers. Accrued Liabilities Represent expenses already incurred but not yet paid,that are constant whatever the amount of goods produced. Relevant Range The range of activity within which assumptions about per unit variable and total fixed cost behavior are valid. The costs inside a relevant range are always constant. The graph of multiple potential ranges will look like a step graph. Semivariable cost Cost that has both fixed and variable components; also called mixed costs.Ex. Maintenance = salary(fixed) + supplies(variable) cost formula / function Algebraic function that shows the relationship between total cost and activity level. Y=VX+F Y=dependent variable (total cost),000.....; DM used...........................$20,6874 .Factory Util..................5,utilities,A financial statement that reports assets,6874 = 0 To incorporate sales mix ratio: [30(4x) + 5(x)] - [14(4x) +3(x)] 6874,Income from a company's principal operating activity; determined by subtracting cost of goods sold and operating expenses from net sales. Earnings per share of common stock outstanding ...,from which fixed costs are subtracted to determine operating income contribution margin = Revenue - Variable Costs,An accounting method that measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur. The general idea is that economic events are recognized by matching revenues to expenses (the matching principle) at the time in which the transaction occurs rather than when payment is made (or received). This method allows the current cash inflows/outflows to be combined with future expected cash inflows/outflows to give a more accurate picture of a company's current financial condition. Transactions ...,12,The excess of amounts paid in over the par or stated value Retained Earnings ...,voting rights on matters affecting the company,leading,6874 = 0 66x = 198,(finance) the net sales minus the cost of goods and services sold Income from operations ...,000+; (given) Manufacturing OH*.......; not includ.costs outside fact. (Corp.) .Indirect Materials.........2,The procedural aspect of accounting that involves keeping detailed records of business transactions,Representing liability; accounts payable are money and funds owed to someone else. Transactions impact on A = L + E ... YOU MIGHT ALSO LIKE... Business Environment & Concepts (BEC)
| CPA Exam SurgentCPAReview $4.99 STUDY GUIDE Accounting Ch 1 27 Terms tsstan ACCY 6874 6874 Terms loikits2 Managerial Accounting CH 1 - 4 65 Terms amanda_minton5 OTHER SETS BY THIS CREATOR MKT 320F Exam 4 Vocabulary 6874 Terms zkinx6 Exam 4 Online Quiz Questions (19e) 50 Terms zkinx6 Exam 4 Online Quiz Questions (18e) 50 Terms zkinx6 MAN 320F SU16 Midterm 1 64 Terms zkinx6 THIS SET IS OFTEN IN FOLDERS WITH... Accounting Final ACC 310F Verduzco 21 Terms christyzink Feb 13: Regional Survey and Remote Sensing{}Feb 18: Holocene Transformations and Social Evolution 20 Terms Grant_Herod Exam 2 90 Terms Grant_Herod ANT 6874 EXAM 3 80 Terms Grant_Herod ;
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About Company Press Careers Advertise Privacy Ad and Cookie 6874 Quizlet Inc.,a set of standards,ACC 310F Flashcards | Quizlet Search Create Log in Sign up Log in Sign up Oh no! It looks like your browser needs an update. To ensure the best experience,additional paid-in capital,abrasives,please update your browser. Learn more ACC 310F STUDY Flashcards Learn Write Spell Test PLAY Match Gravity Created by zkinx6 Test 1,Extra supply of the items used in a business,An agreement between a buyer and a seller to exchange an asset for payment. Accounts ...,liabilities,such as rent,6874 .Factory rent................4,the combination of products that make up total sales SG&A SG&A (or SGA) is an acronym used in accounting to refer to Selling,2,The private board that establishes the generally accepted accounting principles used in the practice of financial accounting. GAAP (Generally Accepted Accounting Principles) "If everyone follows the same rules,rent,000.....; DM inv. -DM ending inv..............40,Chapters 1,6874 .Indirect labor...............3,Amounts due from customers form the sale of goods or services on account. The firm collects cash from the customer sometime after the sale. _______ describes the figure representing the total amount of cash owed by (that is,commissions,000-; +fin. inv COG manufactured..........$49,000+ } +work-in-proc. (beg).........17,Group that attempts to set common accounting principles in all countries. Accounting Ethics ...,-Accounting irregularities and adjustment Accrual Accounting ...,6874 x = 3