Principles of Management Accounting
Allocate decision authority, support decisions, evaluate performance.
Management accounting role
Provide relevant info for decision-making and control.
Manufacturing costs include?
Direct materials, direct labor, manufacturing overhead.
Flow of physical goods
Tracks raw materials, WIP, finished goods movement.
Product vs Period costs
Product: manufacturing; Period: operating expenses.
Manufacturing inventories
Materials, WIP, finished goods.
Manufacturing cost accounting
Tracks and assigns manufacturing costs.
Cost of finished goods
Total cost of completed, unsold products.
Management accounting system
Framework for resource allocation, info, performance.
Decision making authority
Assigned responsibility over resources.
Performance evaluations and reward
Use info to assess and reward managers.
Manufacturing costs components
Direct materials, direct labor, overhead.
Flow of physical goods system
Real-time tracking via perpetual inventory.
Prime costs
Direct materials + direct labor.
Conversion costs
Direct labor + manufacturing overhead.
Work in process inventory
Partially completed goods in production.
Finished goods inventory
Completed products ready for sale.
Management accounting system purpose
Support decision-making, resource control, performance evaluation.
Test your knowledge with 9 questions on Fundamentals of Management and Manufacturing Costs.
1. In the framework of principles of management accounting, which of the following is generally established first in the process of resource management?
2. What is the primary function of the management accounting role as described in the course content?
Review the complete course in the revision sheet for Fundamentals of Management and Manufacturing Costs.
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