Financial Accounting
reporting financial information to external parties (like stockholders, creditors, and regulators)
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| Term | Definition |
|---|---|
| Financial Accounting | reporting financial information to external parties (like stockholders, creditors, and regulators) |
| Managerial Accounting | providing information to employees within an organization so that they can formulate plans, control operations, and make operations |
| Direct Costs | costs that can be easily and conveniently traced to a unit of product or other cost object (ex- direct material and direct labor) |
| Indirect Costs | costs that can't be easily and conveniently traced to a unit of product or other cost object (ex- manufacturing overhead) |
| Common Costs | indirect costs incurred to support a number of cost objects, these costs can't be traced to any individual cost object |
| Direct Materials | raw materials that become an integral part of the product and that can be conveniently traced directly to it (ex- a seat installed in an aircraft) |
| Direct Labor | labor cost that can be easily traced to individual units of product (ex- waged paid to automobile assembly workers) |
| Manufacturing Overhead | includes all manufacturing costs except direct material and direct labor, these costs can't be readily traced to finished products (ex-property taxes, utility costs) |
| Indirect Materials | involved in manufacturing overhead to describe materials that can't be easily or conveniently traced to specific units of product |
| Indirect Labor | involved in manufacturing overhead to describe labor costs that can't be easily or conveniently traced to specific units of product |
| Period Costs | includes all selling costs and administrative costs |
| Selling Costs | costs necessary to secure the order and deliver the product, selling costs can be either direct or indirect costs |
| Administrative Costs | all executive, organizational, and clerical costs (administrative costs can be either direct or indirect costs) |
| Product Costs | include all costs involved in acquiring or making a product (this includes direct materials, direct labor, and manufacturing overhead) |
| Raw Materials (In the Context of Manufacturing Product Costs) | include any materials that go into the final product |
| Work in Process (In the Context of Manufacturing Product Costs) | consists of units of product that aren't complete all the way and require further work before they are ready for sale to a customer |
| Finished Goods (In the Context of Manufacturing Product Costs) | consist of completed units of product that have not yet been sold to customers |
| Variable Cost | a cost that varies, in total, in direct proportion to changed in the level of activity |
| Fixed Cost | a cost that remains constant, in total, regardless of changes in the level of activity |
| Committed Fixed Cost | long term, can't be significantly reduced in the short term |
| Discretionary Fixed Cost | may be altered in the short term by current managerial decisions |