Professional Documents
Culture Documents
ch19 Revised 2020
ch19 Revised 2020
19 Managerial Accounting
Learning Objectives
Identify the features of managerial accounting and the
1 functions of management.
19-2
LEARNING Identify the features of managerial accounting
OBJECTIVE
1 and the functions of management.
19-3 LO 1
Comparing Managerial and Financial
Accounting
Illustration 19-1
Differences between financial and managerial accounting
19-4 LO 1
Management Functions
19-5 LO 1
Organizational Structure
Illustration 19-2
A typical corporate
organization chart
19-6 LO 1
DO IT! 1 Managerial Accounting Overview
19-7 LO 1
DO IT! 1 Managerial Accounting Overview
19-8 LO 1
Describe the classes of manufacturing costs
LEARNING
OBJECTIVE
2 and the differences between product and
period costs.
19-9 LO 2
Manufacturing Costs
19-10 LO 2
Manufacturing Costs
DIRECT MATERIALS
Raw Materials
Basic materials and parts used in
manufacturing process.
Direct Materials
Raw materials that can be physically and directly associated
with the finished product during the manufacturing process.
19-11 LO 2
Manufacturing Costs
INDIRECT MATERIALS
1. Not physically part of the finished product or
19-12 LO 2
Manufacturing Costs
DIRECT LABOR
Work of factory employees that can be
physically and directly associated with
converting raw materials into finished
goods.
Indirect Labor
Work of factory employees that has no physical association
with the finished product or for which it is impractical to trace
costs to the goods produced.
19-13 LO 2
Manufacturing Costs
MANUFACTURING OVERHEAD
Costs that are indirectly associated with manufacturing
the finished product.
Includes all manufacturing costs except direct materials
and direct labor.
Also called factory overhead, indirect manufacturing
costs, or burden.
19-14 LO 2
Product Versus Period Costs
Product Costs
Direct materials
Components: Direct labor
Manufacturing overhead
19-15 LO 2
Product Versus Period Costs
Period Costs
Charged to expense as incurred.
Non-manufacturing costs.
Includes all selling and administrative expenses.
19-16 LO 2
Product Versus Period Costs
Illustration 19-3
Product versus period costs
19-17 LO 2
Product Versus Period Costs
Illustration 19-4
Assignment of costs to cost categories
19-18 LO 2
Product Versus Period Costs Illustration 19-4
Assignment of costs
to cost categories
19-19 LO 2
Product Versus Period Costs
Illustration 19-5
Computation of total
manufacturing costs
19-20 LO 2
DO IT! 2 Managerial Cost Concepts
19-21 LO 2
Demonstrate how to compute cost of goods
LEARNING
OBJECTIVE 3 manufactured and prepare financial statements for a
manufacturer.
Income Statement
Under a periodic inventory system, the income statements
of a merchandiser and a manufacturer differ in the cost of
goods sold section.
“COGS”
19-22 LO 3
Helpful Hint
Income Statement Assume a periodic
inventory system in
this illustration.
Illustration 19-6
Cost of goods sold components
19-23 LO 3
Income Statement
Illustration 19-7
Cost of goods sold sections of
merchandising and manufacturing
Income statements
19-24 LO 3
Cost of Goods Manufactured
Illustration 19-8
19-25 Cost of goods manufactured formula LO 3
Illustration 19-9
Cost of goods
manufactured schedule
19-26 LO 3
Balance Sheet
19-27 LO 3
Balance Sheet
Illustration 19-11
Current assets sections of
merchandising and manufacturing
balance sheets
19-28 LO 3
DO IT! 3 Cost of Goods Manufactured
19-29 LO 3
DO IT! 3 Cost of Goods Manufactured
19-30 LO 3
LEARNING Discuss trends in managerial
OBJECTIVE
4
accounting.
Service Industries
Much of the U.S. economy has shifted toward an
emphasis on providing services rather than goods.
Over 50% of U.S. workers are now employed by service
companies.
Most of the techniques learned for manufacturing firms
are applicable to service companies.
19-31 LO 4
Focus on the Value Chain
Illustration 19-12
A manufacturer’s value chain
19-32 LO 4
Focus on the Value Chain
19-33 LO 4
Focus on the Value Chain
Theory of Constraints
Constraints (“bottlenecks” ) limit the company’s
potential profitability.
A specific approach to identify and manage these
constraints in order to achieve company goals.
19-34 LO 4
Focus on the Value Chain
19-35 LO 4
Balanced Scorecard
19-36 LO 4
Business Ethics
19-37 LO 4
Business Ethics
19-38 LO 4
Business Ethics
19-39 LO 4
Corporate Social Responsibility
19-40 LO 4
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19-41