1.Â Â Â Describe the major differences between Managerial Accounting and Financial Accounting.
Generally no constraints.
Data is used by managers at various levels within the company.
Constrained be GAAP and/or IAS
Data is used by outside parties like banks, investors and other stakeholdes.
2.Â Â Â Define the term cost object.
A cost object is a responsibility center, project, product or other item for which a separate measurement of cost is desired.Â Cost objects are defined by management.Â Cost objects can include cost centers, projects and activities.
3.Â Â Â Describe overhead costs and provide an example.
Overhead costs are indirect costs that cannot be directly assigned to a cost center.Â Utilities, rent and telephone expenses could be examples of overhead costs.
4.Â Â Â What are the two major components of the controlling module (CO)?
Configuration and application.Â The purpose of configuration is to customize CO to meet the specific needs of the client.Â The application component supplies the tools necessary for internal reporting and analysis.
5.Â Â Â Please list the five CO sub modules.
â€¢Â Â Â Cost Center Accounting (CCA)
â€¢Â Â Â Overhead Orders and Projects (CO-OPA)
â€¢Â Â Â Activity Based Costing (CO-ABC)
â€¢Â Â Â Product Cost Accounting (CO-PC)
â€¢Â Â Â Profitability Analysis (CO-PA)
6.Â Â Â True or False?Â Activity based costing is primarily used to capture the costs of internal events, such as travel costs and trade fairs.
False.Â ABC provides a business process view of overhead costs.Â Internal Orders are used primarily for internal company events.
7.Â Â Â List 3 major functions of the PC module.
Product cost planning enables:
â€¢Â Â Â Calculation of standard internal cost for manufactured goods
â€¢Â Â Â Calculation of WIP during month end closing
â€¢Â Â Â Calculation of period end variances
â€¢Â Â Â Settlement of Product Costs
8.Â Â Â True or False?Â PCA is generally used for margin reporting and cost of sales accounting.
False.Â PA is used for margin reporting and cost of sales accounting.Â PCA is used for period based accounting and complete financial statements.
9.Â Â Â What is the primary integration point between the CO and FI modules?
G/L expense accounts are the primary cost elements in CO.