Question 1

activity based budgeting

Accepted Answer

a budget system based on expected activities and allows management to plan for resources required to perform activities

Question 2

budget

Accepted Answer

a formal statement of a company\'s future plan

Question 3

budgeted balance sheet

Accepted Answer

shows predicted amounts for the company\'s assets, liabilities, and equity as the end of the budget period

Question 4

budgeted income statement

Accepted Answer

a managerial accounting report showing predicted amounts of sales and expenses for the budget period

Question 5

budgeting

Accepted Answer

the process of planning future business actions and expressing them as formal plans

Question 6

capital expenditures budget

Accepted Answer

lists dollar amounts to be both received from plant asset disposals and spent to purchase additional plant assets to carry out the budgeted business activities

Question 7

cash budget

Accepted Answer

shows expected cash inflows and outflows during the budget period

Question 8

continuous budgeting

Accepted Answer

prepare rolling budgets. The practice of preparing budgets for each of several future periods and revising those budgets as each period is completed

Question 9

general and administrative expense budget

Accepted Answer

plans the predicted operating expenses not included in the selling expenses budget

Question 10

manufacturing budget

Accepted Answer

shows the budgeted costs for direct materials, direct labor, and overhead. Based on the budgeted production volume from the production budget.

Question 11

master budget

Accepted Answer

a formal, comprehensive plan for a company\'s future

Question 12

merchandise purchases budget

Accepted Answer

companies use various methods to help managers make inventory purchasing decisions. These methods recognize that the number of units added to inventory depends on budgeted sales volume

Question 13

production budget

Accepted Answer

shows the number of units to be produced each month

Question 14

rolling budgets

Accepted Answer

companies revise their entire set of budgets for the months and quarters remaining and add new monthly or quarterly budgets to replace the ones that have lapsed

Question 15

safety stock

Accepted Answer

a quantity of inventory that provides protection against lost sales caused by unfulfilled demands from customers or delays in shipments from suppliers

Question 16

sales budget

Accepted Answer

shows the planned sales units and the expected dollars from these sales

Question 17

selling expense budget

Accepted Answer

a plan listing the types of amounts of selling expenses expected during the budget period

Question 18

benchmarking

Accepted Answer

Evaluate or check (something) by comparison with a standard:

Question 19

budget report

Accepted Answer

contain relevant info that compares actual results to planned activities

Question 20

budgetary control

Accepted Answer

managament\'s use of budgets to monitor and control a company\'s operations

Question 21

controllable variance

Accepted Answer

the difference between actual overhead costs incurred and the budgeted overhead costs based on a flexible budget

Question 22

cost variance

Accepted Answer

the difference between actual and standard costs

Question 23

efficiency variance

Accepted Answer

occurs when standard direct labor hours expected for actual production differ from actual direct labor hours used

Question 24

favorable variance

Accepted Answer

when compared to budget, the actual cost or revenue contributes to a higher income. actual revenue higher than budgeted revenue

Question 25

fixed budget

Accepted Answer

based on a single predicted amount of sales or other measure of activity (also called static budget)

Question 26

fixed budget performance report

Accepted Answer

compares actual results with results expected under its fixed budget

Question 27

flexible budget

Accepted Answer

a report based on predicted amounts of revenues and expenses corresponding to the actual level of output

Question 28

flexible budget performance report

Accepted Answer

lists differences between actual performance and budgeted performance based on actual sales volume or other activity level

Question 29

management by exception

Accepted Answer

means that managers focus attention on the most significant differences between actual costs and standard costs and give less attention to areas where performance is close to standard

Question 30

overhead cost variance

Accepted Answer

difference between total overhead cost applied to products and total overhead cost actually incurred

Question 31

price variance

Accepted Answer

difference between actual price per unit of input and budgeted price per unit of input

Question 32

quantity variance

Accepted Answer

difference between actual quantity of input and budgeted quantity of input

Question 33

spending variance

Accepted Answer

occurs when management pays an amount different than standard price to acquire an item

Question 34

standard costs

Accepted Answer

preset costs for delivering a product or service under normal conditions

Question 35

unfavorable variance

Accepted Answer

when compared to budget, the actual cost or revenue contributes to a lower income

Question 36

variance analysis

Accepted Answer

analyzing between actual and budgeted numbers.

Question 37

volume variance

Accepted Answer

difference between actual volume of production and standard volume of production

Question 38

balanced scorecard

Accepted Answer

a system of performance measures used to assess company and division manager performance. Including customer, internal processes, innovation and learning, and financial.

Question 39

controllable costs

Accepted Answer

costs that the manager has the power to determine or affect amount incurred

Question 40

cost based transfer pricing

Accepted Answer

Transfer price based on the historical or standard cost incurred by the supplying segment.

Question 41

cost center

Accepted Answer

incurs costs without directly generating revenues

Question 42

departmental accounting system

Accepted Answer

provide information for managers to evaluate the profitability or cost effectiveness of each department\'s activities

Question 43

departmental contribution to overhead

Accepted Answer

a report of the amount of sales- direct expenses

Question 44

direct expenses

Accepted Answer

costs readily traced to a department because they are incurred for that department\'s sole benefit

Question 45

hurdle rate

Accepted Answer

the cost of obtaining financing

Question 46

indirect expenses

Accepted Answer

costs that are incurred for the joint benefit of more than one department and cannot be readily traced to only one department

Question 47

investment center

Accepted Answer

incurs costs and generates revenues, it is responsible for effectively using center assets

Question 48

investment center residual income

Accepted Answer

residual income

Question 49

investment center return on total assets

Accepted Answer

return on investment

Question 50

investment turnover

Accepted Answer

The amount of sales generated for every dollar\'s worth of assets

Question 51

joint cost

Accepted Answer

costs incurred to produce or purchase two or more products at the same time

Question 52

market based transfer price

Accepted Answer

Transfer price based on the external market price less any cost savings; it offers the closest approximation to an arm\'s-length price possible for intersegment transactions.

Question 53

negotiated transfer price

Accepted Answer

Transfer price established through mutual agreement of the selling and buying segments.

Question 54

profit center

Accepted Answer

incurs costs and generates revenues; selling departments

Question 55

profit margin

Accepted Answer

The amount by which revenue from sales exceeds costs in a business.

Question 56

responsibility accounting performance report

Accepted Answer

accumulates and reports costs that a manager is responsible for and their budgeted amounts

Question 57

responsibility accounting system

Accepted Answer

control costs and expenses and evaluate managers\' performances by assigning costs and expenses to the managers responsible for controlling them

Question 58

transfer price

Accepted Answer

input to record transactions within same company

Question 59

uncontrollable costs

Accepted Answer

costs that are not in manager\'s control

Question 60

investment center NI/ investment center average invested assets

Accepted Answer

return on investment

Question 61

investment center NI- Target investment NI

Accepted Answer

residual income

Question 62

responsibility accounting budgets

Accepted Answer

plans that identify costs and expenses under each manager\'s control

Question 63

revenue/ asset

Accepted Answer

investment turnover

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