Chapter 1

Question 1

Managerial Accounting

vs

Financial Accounting

Answer 1

Question 2

Management Functions

Answer 2

1. Planning
2. Directing
3. Controlling

Question 3

Manufacturing Costs

Answer 3

“Herstellungskosten”

• Direct Materials
• Direct Labor
• Manufacturing Overhead

Question 4

Raw Materials

Answer 4

• Basic materials and parts used in the manufacturing process

Question 5

Direct Materials

Answer 5

“Materialeinzelkosten”

• Raw Materials that can be physically and directly associated with the finished product during the manufacturing process

Question 6

Indirect Materials

Answer 6

• Considered part of manufacturing overhead
• NOT physically a part of the finished product or
• or impractical to trace to the finished product

Question 7

Direct Labor

Answer 7

“Fertigungseinzelkosten”

• Work of a factory employee that can be physically and directly associated with cnverting raw materials into finished goods
• Direct Labor cost vom Time Ticket ablesen!!!

Question 8

Indirect Labor

Answer 8

• NO physical association with the finished product
• or impractical to trace

Question 9

Manufactoring Overhead

Answer 9

“Gemeinkosten”

• Costs that are indirectly associated with manufactoring the finished product
• Includes all MANUFACTORING COSTS expect direct materials and direct labor
• Im “Manufacturing Overhead Account” werden alle Kosten zusammengefasst (Inventory Account)
• NO admincost !!!!!!

Also called:

factory overhead, indirect manufacturing cost or burden

Question 10

Product Costs

Answer 10

• Components: (-> “Produktionskosten”)
• • Direct Materials
    
    • Direct Labor
    • Manufactoring Overhead
• Costs that are an integral part of production
• Recorded in the “inventory” account
• Not an expense (COGS) until the good is sold

Question 11

Period Costs

Answer 11

• Non-Manufactoring costs
• Includes all selling and administrative expenses
  
  • “Vertriebs- und Verwaltungskosten”
• Charged to expenses as incurred

Question 12

Income Statement and COGS

Merchandiser vs. Manfacturer

Answer 12

Manufacturing Costs are reported in the income statement as an expense, once the manufactured item has been sold

Question 13

Cost of Goods Manufactured

Answer 13

Beginning Work in Process Inventroy

+ Total Manufacturing Costs

(= Total Cost of Work in Process)

• Ending Work in Process Inventory

_________________________________

= Cost of Goods Manufactured

Question 14

Total Manufacturing Costs

Answer 14

= Direct Materials + Direct Labor + Manfacturing Overhead

Question 15

Direct Materials bzw. Direct Materials Used

Answer 15

= Raw Materials Inventory t=0

+ Raw Materials Purchased

• Raw Materials Inventory t=1

Question 16

The Inventory account of a manufacturer

vs.

The Inventory account of a merchandising company

Answer 16

Manufacturer:

• Raw Materials
• Work in Process
• Finished Goods

Merchandising Company:

• Shows ONLY One Category of Inventory

Question 17

Just-In-Time Inventory Method

Answer 17

• Inventory System in which goods are manufactured or purchased just in time for sale

Question 18

Total Quality Management

Answer 18

• Reduce defects in finished products, with the goal of zero defects

Question 19

Theory of Constraints

Answer 19

• Constraints (“Bottlenecks”) limit the complanys potential profitability
  *

Question 20

Manufacturing Overhead Cost ?

Factory Utilties

Office Equipment Utilities

Answer 20

• Factory Utilities: MANUFACTORING OVERHEAD
• Office Equipment Utilities: EXPENSE
  
  • Costs are NOT indirectly associated with manufactoring the finished product