Chapter 1:

1. Managerial accounting reports provide decision-making information for internal users. The reports need not follow GAAP, and the reports often focus on the future.

2. The controller is the top management accountant in a company.

3. Under Total Quality Management, a business strives to improve performance in conjunction with goal setting.

Chapter 2:

1. Manufacturing or product costs have three components: direct materials, direct labor, and manufacturing overhead. Know what it included in each component.

2. Direct costs are costs that can be traced conveniently and economically to a cost object. Indirect costs are not traced directly to a certain cost object.

3. Selling and general/administration costs are nonmanufacturing or period costs that are reported on the Income Statement. These costs are used to generate revenues during the current period.

4. A manufacturer has three inventory accounts: Raw Materials, Work-in-Process, and Finished Goods. These inventory accounts are assets that are reported on the Balance Sheet.

5. A cost object is any product, service, or department which receives allocated costs to determine its cost.

6. Sunk costs are past costs that are not relevant for present decision-making purposes.

7. The cost of goods manufacturing is the cost of the items that are completed and transferred to Finished Goods during a period.

8. What is the cost of goods manufactured formula and the cost of goods formula .