question

Similarity between financial and managerial accounting?

answer

Both draw upon data from an organization's basic accounting system.

question

Objective of managerial accounting:Assisting in controlling and evaluating operations. Yes or no

answer

Yes

question

Objective of managerial accounting:Providing info for decision making and planning. Yes or no

answer

Yes

question

Objective of managerial accounting:Measuring the performance of managers and sub-units. Yes or No

answer

Yes

question

Objective of managerial accounting:Motivating managers towards the organization's goals. Yes or no

answer

Yes

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Who is responsible for raising capital and safeguarding the organization's assets?

answer

Treasurer

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Managerial accounting focuses primarily on?

answer

The needs of managers internal to the organization.

question

Variable costs are those costs that:

answer

In total vary directly with changes in activity level.

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Total costs are $140,000 when a company produces 10,000 units. Of this amount, variable costs are $4 per unit. What are the total costs when 8,000 units are produced?

answer

132,000

question

As a company begins to operate outside the relevant range, the accuracy of cost estimates for fixed and variable costs:

answer

Fixed Decrease and Variable Decrease

question

Fixed costs are those costs that

answer

Increase on a per unit basis as activity decreases

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What method of cost estimation fits a cost line using exactly two data points?

answer

High-low method

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In regression analysis, the fixed cost component is represented by what variable on the regression analysis output?

answer

Intercept coefficient

question

The break-even point in sales dollars can be calculated by dividing

answer

Fixed expenses by the contribution margin ratio

question

Cost-volume-profit analysis general assumptions: Expenses can be categorized as fixed, variable,or semi-variable(mixed). T or F

answer

True

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Cost-volume-profit analysis general assumptions: The selling price per unit of product will remain constant as volume varies within the relevant range. T or F

answer

True

question

Cost-volume-profit analysis general assumptions: Total fixed expenses remain constant as activity changes. T or F

answer

True

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Cost-volume-profit analysis general assumptions: The efficiency and productivity of the production process and workers remain constant. T or F

answer

True

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The difference between the current sales revenue and the break-even sales revenue is the

answer

Margin of saftey

question

Assume that selling price is greater than variable cost. Now suppose both the selling price and the variable cost per unit decrease by $5.00. What effect would these changes have on the total contribution margin in dollars and on the contribution margin ratio?

answer

Total contribution margin($)- No change Contribution margin ratio- Increase

question

Inventoriable costs that have become expenses can be found on the Income Statement in:

answer

Cost of Goods Sold. (Remember, we hold these expenses on the Balance Sheet until the product is sold, and then we match the expense with the Sales Revenue.)

question

Example of an Indirect Product Cost?

answer

Property taxes on plant facilities

question

Which of the following Redondo Beach T-Shirt Makers costs is a period cost?

answer

Salary of owner's secretary

question

Process costing is used when

answer

large numbers of nearly identical products are manufactured.

question

When under-applied or over-applied manufacturing is prorated, accounts to which the difference may be allocated include:

answer

Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold

question

The full-time employees at Percy Enterprises work 8 hours per day, while the part-time employees work 4 hours per day. Percy has 2,000 full-time employees and 800 part-time employees. What is the number of full-time equivalent employees?

answer

2,400

question

Normal Inc. applies overhead based on labor hours. For the year, 4600 labor hours were budgeted, and the predetermined overhead rate was $20 per hour. During the year, actual labor hours amounted to 4,500 and actual overhead amounted to $95,000. What journal entry would be made to close the Manufacturing Overhead account to Cost of Goods Sold?

answer

Cost of goods sold- 5,000 Manufacturing Overhead- 5,000

question

Income reported under absorption and variable costing is

answer

Sometimes different

question

Under variable costing, fixed overhead is

answer

Expensed in the period it is incurred

question

For external reporting purposes, Generally Accepted Accounting Principles (GAAP) require that reported net income be based on

answer

Absorption costing

question

Primary benefits of a budget: Evaluating performance and providing incentives. Yes or No

answer

Yes

question

Primary benefits of a budget: Planning. Yes or No

answer

Yes

question

Primary benefits of a budget: Controlling profit and operations. Yes or No

answer

Yes

question

Primary benefits of a budget: Facilitating communication and coordination. Yes or No

answer

Yes

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Static budgets are prepared for one level of sales volume. True or False

answer

True

question

Dambrodt Travel Agency's actual operating income for the current year is $25,000. The flexible budget's operating income for actual volume achieved is $32,000, while the static budget's operating income is $35,000. What is the sales volume variance for operating income?

answer

3,000 unfavorable

question

Suppose a flexible budget is prepared for a level of output less than the original static budget. As compared to the static budget,

answer

The total budgeted variable costs will decrease.( If the flexible budget is based on a smaller volume than the original static budget, total variable costs will decrease--- same variable cost per unit x less units= less total variable costs.)

question

A Price variance can be represented by

answer

Actual Quantity X (Actual Price- Standard Price)

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A standard cost is

answer

A budget for the production of one unit of a product or service

question

When considering the significance of cost variance, mangers should consider: Size of the variance. Yes or no

answer

Yes

question

When considering the significance of cost variance, mangers should consider:Pattern of recurring variances. Yes or no

answer

Yes

question

When considering the significance of cost variance, mangers should consider:Trends of the variances. Yes or no

answer

Yes

question

When considering the significance of cost variance, mangers should consider:Controllability of the cost item. Yes or No

answer

Yes

question

Machine set-up would most likely be classified as a

answer

Batch- Level activity

question

Inventoriable cost can be found in a company's accounting records. T or F

answer

True

question

Sunk costs can be found in a company's accounting records. T or F

answer

True

question

Marketing costs can be found in a company's accounting records. T or F

answer

True

question

In cost and decision making per unit fixed costs can be misleading because such amounts appear to behave as variable costs when, in actuality, the amounts relate to fixed expenditures. T or F

answer

True

question

The city of Miami is about to replace an old fire truck with a new vehicle in an effort to save maintenance and other operating costs. Which of the following items, all related to the transaction, would not be considered in the decision. 1. Purchase price of the new vehicle 2. Purchase price of the old vehicle 3. Savings in operating costs as a result of the new vehicle 4. Proceeds from disposal of the old vehicle. 5. Future depreciation on the new vehicle

answer

Purchase price of the old vehicle

question

The schmidt corporation has in its inventory 4,000 damaged radios that cost $50,000. The radios can be sold in their present condition for $32,000, or repaired at a cost of $43,000 and sold for $66,000. What is the opportunity cost of selling the radios in their present condition (i.e. what will we be giving up if we choose to sell the radios as is instead of repairing them)?

answer

23,000

question

What is the concept of a relevant cost?

answer

A future cost that differs among alternatives

question

Investment Center

answer

Responsible for revenues, cost and capital improvements, Maximize returns as measured by ROI or residual income

question

Profit Center

answer

Responsible for profit only, maximize segment profit

question

Cost Center

answer

Responsible for cost only, Maximize cost while providing a acceptable level of quality.

question

Traceable fixed costs

answer

subtracted from contribution margin to derive segment margin

question

Common fixed cost

answer

not allocated, reported in total company column only.

question

Balanced Scorecard

answer

Is a comprehensive method of performance evaluation. considers both financial and operating measures when evaluating the performance of a company and its segments

question

Predetermined MOH Rate

answer

Estimated MOH costs/ Estimated Cost Driver

question

Gross Profit=

answer

Sales Revenue- Cost of Goods Sold

question

Contribution Margin

answer

Sales revenue available to cover fixed costs plus desired operating profit, after covering variable costs. Sales Price- Variable Costs

question

Contribution Margin Ratio

answer

% of every sales dollar that goes towards fixed costs + operating profits. Contribution Margin/Sales price

question

Break even in Units

answer

Fixed Expenses/Unit Contribution Margin

question

Break even in Sales $

answer

Fixed Expenses/ Contribution Margin Ratio

question

Required Sales Dollars

answer

(Fixed Expenses+ Target Profit) / Contribution Margin Ratio

question

Profit Equation

answer

Sales Revenue - Variable Cost - Fixed Cost = Operating Profit

question

Traditional Income Statement based on

answer

Function

question

Contribution Margin income statement based on

answer

Cost Behavior

question

Margin of safety

answer

Excess of actual sales over breakeven sales. Cushion or drop in sales the company can sustain before losing money

question

participative budgeting

answer

means that budget preparation begins with the lowest level of management and is adjusted at each level to align with the strategic plan

question

Incremental budgeting

answer

means that budget preparation begins with last year budget

question

rolling budgets

answer

always includes 12 months of data

question

standard cost

answer

is a budget for a single unit of product

question

static/ master budgets

answer

prepared for one level of output(volume)

question

flexible budgets

answer

prepared for any level of volume within revlent range

question

Unit

answer

activity preformed for each individual unit

question

batch

answer

preformed once for a group of products regardless of the numbers of units in the batch

question

product

answer

activity preformed for entire product line

question

customer

answer

preformed for specific customers

question

organization

answer

preformed to keep the bis running and enable manufacturing of prodcuts

question

Avoidable costs

answer

costs that can be avoided if you stop a particular activity

question

sunk cost

answer

costs incurred in the past that cannot be changed regardless of future action

question

Decentralization

answer

dividing operations into smaller segments, allowing each segment to be responsible for its own success

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