Managerial Accounting FSU Final – Flashcards
56 test answers
Unlock all answers in this set
Unlock answers 56question
Inventoriable product cost formula
answer
Cost of item + freight in + import duty = Product cost
Unlock the answer
question
Raw materials inventory formula
answer
Beginning raw materials inventory + Purchases of direct material = Raw materials available for use - Ending raw materials inventory = Direct materials used
Unlock the answer
question
Work in process inventory formula
answer
Beginning WIP inventory + DM used + DL used + MOH= Total Manufacturing Costs - Ending Work in process inventory = COGM
Unlock the answer
question
Finished Goods Inventory Formula
answer
Beginning FGI + COGM = Cost of Goods Available for Sale - Ending FGI= COGS
Unlock the answer
question
Types of Costs Encountered in Decision Making
answer
Controllable Costs Uncontrollable costs Relevant Costs Irrelevant Costs Differential Costs Sunk costs
Unlock the answer
question
Predetermined MOH Rate
answer
Estimated Total MOH costs / Estimated total allocation base
Unlock the answer
question
How do manufactures allocate some MOH to each job?
answer
Predetermined MOH X Actual use of allocation base
Unlock the answer
question
Under allocated MOH
answer
If actual > allocated COGS is understated
Unlock the answer
question
Over allocated MOH
answer
If allocated > actual COGS is overstated
Unlock the answer
question
Allocate MOH using activity based costing system
answer
Total Estimated Costs in Pool / Total Estimated Amount of Allocation Base then Activity Allocation Rate X Actual Amount of Allocation Base used by each job
Unlock the answer
question
Types of Cost Behavoir
answer
Fixed Variable Mixed Step- costs that are fixed over a small range of activity and then jump to a different fixed level with moderate changes in volume Curvilinear Costs- costs that are not linear
Unlock the answer
question
Mixed Cost using Hi-Lo method
answer
1. Pick the volume of high and low months 2. Find the slope- Change in cost/Change in Activity 3. Find the intercept of the high or low month 4. Write cost equation
Unlock the answer
question
Contribution Margin per unit formula
answer
Sales price - VC per unit = CM per unit
Unlock the answer
question
Contribution Margin per unit percentage formula
answer
CM/Sales
Unlock the answer
question
Cost Volume-Profit Analysis formula (Target operating income)
answer
# units = Fixed Expenses + Operating Income/CM per unit
Unlock the answer
question
Break Even Point Formula
answer
FC/CM% or FC/CM per unit
Unlock the answer
question
Margin of Safety Formula
answer
Current Sales - Breakeven Sales
Unlock the answer
question
Margin of Safety Formula Percentage
answer
Margin of Safety/Current Sales
Unlock the answer
question
What is margin of safety
answer
How far sales could drop before a company is is in a loss position
Unlock the answer
question
What is operating leverage?
answer
The relative degree of a fixed and variable costs in a company's cost structure
Unlock the answer
question
Operating leverage factor formula
answer
Contribution margin/Operating Income
Unlock the answer
question
Special Order Decisions
answer
Additional Sales Revenue-Additional Costs= Additional Operating Income
Unlock the answer
question
Pricing Decisions
answer
1. Determine if they are a price taker or Price Setter If Price Taker use Target Costing Sales Price-Cost=Profit If Price Setter Use Cost-Plus Pricing Sales Price-Cost=Profit
Unlock the answer
question
Discontinuing Products, Departments, or Stores
answer
Lost Sales (Negative) + VC Savings + FC Savings = Impact on Operating Income
Unlock the answer
question
Product Mix Decisions
answer
1. Determine CM per hour 2. Maximize most profitable item
Unlock the answer
question
Outsource Decisions (Make or Buy)
answer
Cost to make vs. Cost to Buy Don't forget fixed MOH
Unlock the answer
question
Selling as is or Process Further Decision
answer
Additional Sales Revenue - Additional Cost = Additional Operating Income
Unlock the answer
question
Sales Budget
answer
Cash Sales + Credit Sales = Total Sales Revenue
Unlock the answer
question
COGS, Inventory and Purchases Budget
answer
COGS + EI = Total Needed - BI = Amount to Purchase
Unlock the answer
question
Budgeted Income Statement
answer
Sales Revenue - COGS = Gross Profit - Operating Expenses = Operating Income
Unlock the answer
question
ROI formula
answer
Sales Margin X Capital Turnover Operating Income/Assets
Unlock the answer
question
Sales Margin
answer
Operating Income/Sales
Unlock the answer
question
Capital Turnover
answer
Sales/Assets
Unlock the answer
question
RI formula
answer
Operating Income-(Target Rate of Return x Assets)
Unlock the answer
question
What is lowest acceptable transfer pricing at excess capacity
answer
Variable or Avoidable Cost
Unlock the answer
question
What is lowest acceptable transfer pricing at full capacity
answer
Market
Unlock the answer
question
Master Budget Variance
answer
Master - Actual
Unlock the answer
question
Volume Variance
answer
Master - Flexible
Unlock the answer
question
Flexible Variance
answer
Flexible - Actual
Unlock the answer
question
Direct Material Price Variance
answer
| AP - SP | X ATQ
Unlock the answer
question
Direct Material Quantity Variance
answer
| ATQ - STQ | x SP
Unlock the answer
question
Direct Labor Price Variance
answer
| AP-SP | x ATQ
Unlock the answer
question
Direct Labor Efficiency Variance
answer
| ATQ - STQ | x SP
Unlock the answer
question
Payback Period Formula (equal cash flow)
answer
Initial Investment/Annual Net Cash Inflow
Unlock the answer
question
Accounting Rate of Return Formula
answer
Avg. Annual Operating Income from Asset / Initial Investment
Unlock the answer
question
PV of $1 is
answer
how many years out in the future does the cash flow occur
Unlock the answer
question
PV of Annuity =
answer
for how many years does the cash flow reoccur
Unlock the answer
question
Net Present Value Formula
answer
(Cash Inflow x Present Value of Annuity Table Value for useful years) - Initial Investment
Unlock the answer
question
Internal Rate of Return formula
answer
PV inflows - PV outflows = $0 Find X Check present value of annuity table and see what x is in-between for the useful years value
Unlock the answer
question
Profitability Index formula
answer
PV of net cash inflows / Initial Investment
Unlock the answer
question
Payback Period (unequal cash flow) formula
answer
Add up cash flows until you reach investment amount Find out how much of next year you need
Unlock the answer
question
Max price to pay for project? (NPV)
answer
PV of inflows x IR
Unlock the answer
