Managerial Accounting Notes.docx Chapter 1 Work in Process Inventory (WIP) â cost of p

Managerial Accounting Notes.docx  Chapter 1  Work in Process Inventory (WIP) – cost of products that are partially complete  Controlling – function of keeping activities in accordance with plans  Managerial accounting – primarily concerned with internal users and reports pertain to subunits of the entity  Direct materials – materials that can be physically and directly associate with manufacturing a product  Planning – function of setting goals and objectives  Manufacturing overhead – indirect costs of manufacturing a product  Financial accounting – primarily concerned with external users and reports pertain to entity as a whole  Period costs – costs are non-inventoriable (selling, G&A)  Value chain – all business procedures associated with providing a product or service  Directing – function of coordinating diverse activities to produce smooth running operations  Key Roles of Management: planning, directing, controlling  Manufacturing/Product Costs:  -Direct materials – physical  -Direct labor – people who build/touch a product  -Manufacturing overhead – indirect costs  Product costs – costs that are integral parts of producing a product; recorded in inventory account and not expensed until sold  Period costs – expensed as incurred, non-manufacturing  Property taxes on factory building are considered overhead.  Cost = Beginning Inv + Purchases – Ending Inv