BEC 18 Flashcards
crowding funding is a title in JOBS act or Dodd Frank
Jobs act
Financial stability, orderly liquidation authority and wall street transparency are all titles in which act - Jobs or dodd frank
Dodd Frank
which metric equate the pv of a projects expected cashflows to the pv of its expected costs
IRR
This is because IRR measures the interest rate at which the net present value of a projects cash flow is zero
IRR is also the discount rate at which the net present value is zero.
IRR is the rate of interest that equates the pv of cash outflows and the present vale of cash inflows
What is a spending variance
This is the difference between the amounts budgeted based on actual production and the amounts being spent
This would not be affected if you have a change in capacity
What is volume variance
Volume variance is the difference between actual production and budgeted production
If you have an unfavorable volume variance with production budgeted at 80% then the variance would be even bigger at 100% of capacity
in a job cost system - manufacturing overhead is
Manufacturing overhead are costs that must be incurred in the manufacturing process that do not constitute direct labor or direct materials. As a result, manufacturing overhead is both an indirect cost of jobs and a necessary element in production.
What is included in actual manufacturing overhead in a traditional job order cost system and where is it held
In a traditional job order cost system, actual manufacturing overhead, including indirect materials used in production, is accumulated in an account called factory overhead control.
At the end of the period, this is compared to factory overhead applied, which is the amount charged to work-in-process control, with any differences, or variances, investigated.
The weighted average method of calculating equivalent units includes what types of costs versus the FIFO
WA method includes prior period and current costs
while the FIFO method separates beginning inventory costs from current period costs
When there is NO beginning inventory - the number of equivalent units would be the same under weighted average and FIFO
can both service and mass production use standard costing?
yes - both can - any industry in fact.
Standard costs are used to aid in the budgeting process, pinpoint problem areas, and evaluate performance
How do you allocate the cost of normal defective units between ending WIP and transferred goods
Their costs should be divide up between the two based on there percentages
What measure do you use when you are trying to measure controllable inefficiencies
You would use estimates based on the current attainable performance
When a division of a company trades with another division what price do they use
Its called the transfer price
If it has no extra capacity - Division A will lose profit if it sets its prices lower than ,market
therefore the transfer price should market
what are common methods of allocating joint costs
The physical units method, relative sales value at split off and net realizable value
How should one select a supplier
supplier should be selected on many factors, price, quality, and the ability to make timely deliveries
These are generally all more important than credit policy
You should take a discount at the beginning of there period versus the end in order to not alienate your supplier
Tightening one’s credit management policies involves what kind of risks
- If you have a loose credit policy - you gain sales from both risk and sound customers
Stringent credit generally will result in reduced sales
Stringent will result in in smaller write offs of bad debts
credit periods are likely to be shorter
A/R balance is likely to be lower
Your A/R is likely to be of higher quality - and therefore more attractive as loan collateral
Defaults are smaller - resulting in smaller fees paid to collection agencies
What is there result when you change the financing of your short-term assets with long term debt vs short term debt
There would be an increase working capital
You are more likely to be able to refinance its short term assets in the future
If you are looking at a downturn in the near future than by refinancing you push the day of reckoning off into the distant future - likely when the recession has turned around
How do you calculate the rate of return on common stock
It is the benefit received which includes both dividends and appreciation in value divided by the cost of stock
(Dividends + chg in price)/beginning price
Why are proceeds from the sale of the assets to be replaces affect the projects net present value
Net present value is the difference between the PV of the inflows from the project and the PV of the cash outflows.
Outflows include cash investment net of proceeds from eh disposal of any old assets being replaced
Inflows include annual after tax cash savings resulting from making the investment and the salvage value of eth assets acquired
net present value is based on cash flows so carrying amount and depreciation only effect income tax
What do IFF and Accounting Rate of return have in common and are differences
Both consider salvage
IRR is based in cashflows, includes time value of money,
ARR - based on accrual based accounting income, ignores time value of money
The association of certified Fraud examiner reports to who
The Nations of Occupational Fraud and Abuse
What do they report on:
the evaluating and design of antifraud control for comprehensiveness and adequacy as part of who’s role
Internal auditor
