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ACG-2071_ Prologue and Chapter 1 (1)
ACG-2071_ Prologue and Chapter 1 (1)
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ACG-2071: Prologue and Chapter 1What 3 things does managerial accounting help managers do? - ANS-Helps managers
plan, control, and make decisions.
What does budget mean? What word should be associated with budget? - ANS-It is a
detailed plan for the future, the word to associate is future.
What are made while planning? How is it achieved? - ANS-Goals are made during the
planning process. Goal setting is achieved through asking questions.
What does controlling entail? How does it look like? - ANS-Controlling is where
feedback is heard. Feedback looks like questions being answered.
What do performance reports compare? - ANS-Compare actual data to budgeted data.
Decision making, in a broad sense, revolve around asking which 3 questions? -
ANS-Decision making revolves around asking: What's sold?, Who's served?, and How's
it to be executed?
What word should be associated with strategy? - ANS-Should be associated with the
word strategy.
In simple terms, what does "customer value propositions are the essence of strategy"
actually mean - ANS-It basically means "the REASONS to go to your company over
your competitors are crucial"
What are the 3 broad categories customer value propositions fall in? - ANS-Customer
intimacy, operational excellence, and product leadership
Describe each of the 3 broad categories that customer value propositions fall in? -
ANS-Customer intimacy are the customized items for each customer
operational excellence is the convenience and low costs (walmart)
product leadership is the highest quality (rolex)
What are the 5 types of classifications for costs? - ANS-The 5 cost classifications are
whether the cost is being assigned to (1) cost objects, (2) manufacturing companies, (3)
financial statements, (4) predicting cost behaviors, or (5) making decisions
, What are cost classifications dependent on? - ANS-Depend on to what the cost is being
assigned to.
What is a direct cost? - ANS-A cost that can be easily traced back to a cost object.
What is a cost object? - ANS-It's basically a thing or particular product.
What is an indirect cost? - ANS-A cost that cannot be easily traced back to a cost
object.
How can a manager's salary be an indirect cost? What does it depend on? - ANS-A
managers salary can be an indirect cost depending on what the cost object is such as if
it were a can of chicken noodle soup
How is a cost traced to a cost object? - ANS-A cost is traced to a cost object if that cost
object caused the cost.
What would a manager's salary be considered? - ANS-Would be considered a common
cost.
What is a common cost? - ANS-An incurred cost that supports various cost objects but
cannot be traced to them individually
What type of cost (direct or indirect) is common cost? Why? - ANS-An indirect cost
because it cannot be individually traced to the various cost objects it supports
When would a managers salary be a direct cost? - ANS-Would be a direct cost if the
cost object was the entire factory.
What question should be asked to see if a cost is indirect or direct to a cost object? -
ANS-Did this cost object cause the cost? or not?
What are the two categories manufacturing companies separate their cost into? -
ANS-Manufacturing cost and nonmanufacturing costs
What are the direct cost categories that manufacturing costs can be further separated
into? - ANS-Manufacturing costs can be divided into two direct cost categories which
are: Direct labor and direct materials
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