HomeClass Notes1,200,000US530,000

ACCT 116 Lecture Notes - Lecture 1: Earnings Before Interest And Taxes, Fixed Cost, Opportunity Cost

45 views7 pages

silvergiraffe603

18 May 2016

School

Drexel University

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Costs are assigned to cost objects for a variety of purposes including pricing, preparing profitability studies, and controlling spending. A cost object is anything for which cost data are desired including products, customers, jobs, and organizational subunits. For purposes of assigning costs to cost objects, costs are classified as either direct or indirect. A direct cost is a cost that can be easily and conveniently traced to a specified cost object. Ex) if a printing company made 10,000 brochures for a specific customer, then the cost of the paper used to make the brochures would be a direct cost of that customer. An indirect cost is a cost that cannot be easily and conveniently traced to a specified cost object. Ex) a campbell soup factory may produce dozens of varieties of canned soups. The factory manager"s salary would be an indirect cost of a particular variety such as chicken noodle soup.

Related Documents

ACCT 116 Lecture Notes - Lecture 4: Allocution, Computer Network, General Ledger

silvergiraffe603

BUSACC 0040- Final Exam Guide - Comprehensive Notes for the exam ( 34 pages long!)

silvertermite598

ACCT20200 Chapter Notes - Chapter 2: Management Accounting, Financial Statement, European Cooperation In Science And Technology

fuchsiahound508

Related Questions

Multiple Choice Questions

1. A cost center is a unit of a business that incurs costs butdoes not directly generate revenues. Which of the following woulddefinitely not be considered a cost center?
A. Accounting department.
B. Purchasing department.
C. Research department
D. Advertising department.
E. All of these could be considered cost centers.

2. A unit of a business that not only incurs costs, but alsogenerates revenues, is called a:
A. Performance center.
B. Profit center.
C. Cost center.
D. Responsibility center.
E. Expense center.

3. Regardless of the system used in departmental costanalysis:
A. Direct costs are allocated, indirect costs are not.
B. Indirect costs are allocated, direct costs are not.
C. Both direct and indirect costs are allocated.
D. Neither direct nor indirect costs are allocated.
E. Total departmental costs will always be the same.

4. An accounting system that provides information thatmanagement can use to evaluate the profitability and/or costeffectiveness of a department's activities is a:
A. Departmental accounting system.
B. Cost accounting system.
C. Service accounting system.
D. Revenue accounting system.
E. Standard accounting system.

5. Expenses that are easily traced and assigned to a specificdepartment because they are incurred for the sole benefit of thatdepartment are called:
A. Direct expenses.
B. Indirect expenses.
C. Controllable expenses.
D. Uncontrollable expenses.
E. Fixed expenses.

6. Costs that the manager has the power to determine or at leaststrongly influence are called:
A. Uncontrollable costs.
B. Controllable costs.
C. Joint costs.
D. Direct costs.
E. Indirect costs.

7. Responsibility account performance reports:
A. Become more detailed at higher levels of management.
B. Become less detailed at higher levels of management.
C. Are equally detailed at all levels of management.
D. Are useful in any format.
E. Are irrelevant.

8. Which of the following is an example of a performance measureof internal business processes which would be found in a balancedscorecard?
A. Product defect rates
B. Number of new customers
C. Employee satisfaction
D. Return on Investment
E. Sales growth

9. Which of the following is an example of a performance measureof the customer perspective which would be found in a balancedscorecard?
A. Product defect rates
B. Number of new customers
C. Employee satisfaction
D. Return on Investment
E. Sales growth

burgundybadger233

Multiple Choice Questions

1. A cost center is a unit of a business that incurs costs butdoes not directly generate revenues. Which of the following woulddefinitely not be considered a cost center?
A. Accounting department.
B. Purchasing department.
C. Research department
D. Advertising department.
E. All of these could be considered cost centers.

2. A unit of a business that not only incurs costs, but alsogenerates revenues, is called a:
A. Performance center.
B. Profit center.
C. Cost center.
D. Responsibility center.
E. Expense center.

3. Regardless of the system used in departmental costanalysis:
A. Direct costs are allocated, indirect costs are not.
B. Indirect costs are allocated, direct costs are not.
C. Both direct and indirect costs are allocated.
D. Neither direct nor indirect costs are allocated.
E. Total departmental costs will always be the same.

4. An accounting system that provides information thatmanagement can use to evaluate the profitability and/or costeffectiveness of a department's activities is a:
A. Departmental accounting system.
B. Cost accounting system.
C. Service accounting system.
D. Revenue accounting system.
E. Standard accounting system.

5. Expenses that are easily traced and assigned to a specificdepartment because they are incurred for the sole benefit of thatdepartment are called:
A. Direct expenses.
B. Indirect expenses.
C. Controllable expenses.
D. Uncontrollable expenses.
E. Fixed expenses.

6. Costs that the manager has the power to determine or at leaststrongly influence are called:
A. Uncontrollable costs.
B. Controllable costs.
C. Joint costs.
D. Direct costs.
E. Indirect costs.

7. Responsibility account performance reports:
A. Become more detailed at higher levels of management.
B. Become less detailed at higher levels of management.
C. Are equally detailed at all levels of management.
D. Are useful in any format.
E. Are irrelevant.

8. Which of the following is an example of a performance measureof internal business processes which would be found in a balancedscorecard?
A. Product defect rates
B. Number of new customers
C. Employee satisfaction
D. Return on Investment
E. Sales growth

9. Which of the following is an example of a performance measureof the customer perspective which would be found in a balancedscorecard?
A. Product defect rates
B. Number of new customers
C. Employee satisfaction
D. Return on Investment
E. Sales growth

lemonrhinoceros823

1.A key difference between managerial and financial accounting is that

Managerial is only historical data and financial is only future data

Managerial users are typically internal and financial users typically external

Managerial is highly regulated and financial is not

Financial uses much more economic data than managerial
--------------------
2.An example of a period cost in accounting would be

		Materials to make a product
		A factory supervisorÃ¢ s wages
		Brochures used to sell the product
		Depreciation of manufacturing equipment

---------------------

3.Major inventory accounts in a manufacturing environment typically include all of the following except

Raw materials

Work in progress

Office supplies

Finished goods

------------------------

4.When a business is able to simultaneously reduce inventory holding costs and increase customer satisfaction by making products available exactly when a customer wants them, it is likely using

Seasonal control

Just in time inventory management

Factors of production planning

Supply chain distribution
----------------

5.An example of a direct product cost would be

		Prepaid rent of the retail store
		Health insurance costs for sales teams
		Product parts
		The factory janitorial staffÃ¢ s wages

6.An example of manufacturing overhead (indirect product costs) may be all of the following except

		Equipment depreciation
		Plant electric costs
		Materials to make a product
		A factory supervisorÃ¢ s wages